Bereaved people in the West Midlands could gain thousands in Isa rules change

Britain's biggest building society Nationwide made the findings after analysing the cash Isas of customers who had died last year.

The highest pots were found in London, where customers had £16,674 typically, followed by Northern Ireland, where balances were £16,521 on average.

And in the West Midlands, customers held £13,964 in Isas.

The lowest average Isa balance was found in the North West at £13,540. Isa customers were aged 81 typically when they died.

The research follows the announcement made by Chancellor George Osborne in his Autumn Statement last December that savers would be able to pass on their Isas tax-free to loved ones after they had died.

Previously, when a person died the savings in their Isa had lost their tax-free status and their spouse started paying tax on that money.

But the changes mean that if an Isa holder dies, they can now pass on their Isa benefits to their spouse or civil partner via an additional Isa allowance which they will be able to use from April 6.

The surviving spouse or civil partner will be allowed to invest as much into their own Isa as their spouse used to have, in addition to their normal annual Isa limit.

The Government has said that about 150,000 people a year have been losing out on the tax advantages of their partner's Isa after their death, even if they were saving as a couple.

Nationwide was previously part of a successful campaign for Isa parity.

The Government introduced new rules last July which enable people to save all of their Isa allowance into cash, all in stocks and shares or any combination of the two.

Consumers had previously only been able to save up to half of their annual allowance in cash.

The Isa allowance has also become more generous. The limit for the current tax year is £15,000 and from April the annual limit will increase further, to £15,240.

Richard Napier, Nationwide's director of savings, said: "Changes to the Isa rules are entirely welcome as people will be able to take comfort that their surviving partner will be able to reinvest the full value of their Isa savings in a tax-efficient way.

"This is incredibly important, particularly as the majority of customers will be well into their retirement - a time when finances might be tighter."