Meanwhile, the growing dominance of online fund supermarkets in the investment world has also simplified the ISA application process, as it has for buying any other kind of fund.

At the core, the process remains the same: paying money into a designated tax-free account approved by the Inland Revenue.

This is still limited to approved ISA managers, which include fund supermarkets, banks, building societies, insurance companies, friendly societies, National Savings, some supermarkets, fund management companies, financial advisers, stockbrokers and solicitors.

To open an ISA account, you’ll need to give your name, address, date of birth and National Insurance number.

Prior to last year, the product was split into Maxi and Mini regimes and any buying decision had to consider both.

Investors has to choose one of the two routes for their £7000 limit, with different investments within a single maxi Isa or individual stocks and shares and cash Mini ISAs.

Maxi and Mini ISAs have now been abolished, replaced with an overall limit of £7,200 each year.  With Mini ISAs, you could previously invest up to £4,000 into stocks & shares and up to £3,000 into cash. 

Now, you simply have an allowance of £7,200, of which up to £3,600 can go into cash and the balance into stocks & shares. 
So, for example, you might invest £7,200 into stocks & shares, or £2,000 into cash and £5,200 into stocks & shares, or £3,600 each into both elements.

Adviser firm Bestinvest extols the virtue of paying into an ISA every month via direct debit as a great way of saving fore the future.
It outlines several advantages of this phased investing, such as:

• Converting an annual investment amount into more manageable sums of money: it is much easier to afford a few hundred pounds each month than to shell out several thousand in one hit
• Helping develop a good savings discipline.
• Smoothing out market volatility. The last few years have seen stock market movements swing violently from good to bad. Timing the perfect buying opportunity is a fool's game. In contrast, a regular investment will take this difficult decision away: some months you might invest when the market is high, but other months you should benefit from purchasing during a dip. The point is that the ups and downs of the market should get smoothed over

However, Bestinvest business manager Hugo Shaw says that while regular savings plans seem a sensible idea, the recent Isa changes could carry a sting in the tail.

Take the example of someone who, under the old regime, had been carefully saving £4,000 a year via monthly collections and separately taken out their full Cash ISA allowance of £3,000. 

This year, if the same saver decided to leave their Stocks & Shares ISA contributions untouched but fancied putting the full £3,600 into their cash ISA, they would end the year having invested £7,600 into ISAs – which constitutes a £400 breach. 

“The key point is that you cannot rely on your ISA manager to stop direct debit collections in order to avoid exceeding the overall subscription limit - as far as they're concerned, your limit for a Stocks & Shares ISA is £7,200,” he adds.

“If you've separately taken out a cash ISA then the responsibility for keeping within the overall ISA allowance sits firmly on your shoulders. This holds true whether you’re saving on a regular basis or making one-off subscriptions.“

ISAs that have breached the annual limit are known as Invalid Accounts. 

You should, however, be able to continue these ISAs once they have been repaired, which involves removing the excess subscriptions in reverse order. 
So, the most recent contribution needs to be removed first and then the second until you get back to the £7,200 limit. 

The excess will be liable to taxation, subject to the usual rules and allowances for income and capital gains.

If you believe you have breached the annual subscription limit, then the first thing to do is call HMRC’s ISA Helpline on 0845 604 1701. The Helpline staff will decide what action should be taken and instruct you accordingly.

When it comes to buying an Isa, there are various routes available, including direct from providers, via a supermarkets or through some manger of intermediary.

Even if you consult an adviser, most now do much of their business through fund supermarkets, which carry an ever-growing proportion of the industry’s business.

This is primarily down to ease of online transactions and with supermarkets like Cofunds and FundsNetwork offering more than 1000 funds, investors can switch between them at will.

To find an independent financial adviser, try IFA Promotion (IFAP) or The Personal Finance Society.

For stockbrokers and other investment managers, try the Association of Private Client Investment Managers and Stockbrokers (APCIMS). This is particularly useful for investors who want to use an ISA to make direct investment in stocks and shares.

With intermediaries, some offer independent advice on fund choice, although they will either take a commission for this or charge a fee.
The former is typically 3%, which means the adviser will take £216 if you invest £7200 in the ISA.

Other intermediaries do not give tailor-made advice but provide an execution-only or dealing-only service, typically rebating commissions from fund groups to the end client.

These advisers, sometimes known as discount brokers, can also provide give lots of information to enable you choose your own funds.

As an example of how they work, Cavendish Online claims its Renewal Commission Service actually offers investors higher returns via a market-leading commission rebate.

Cavendish retains a one-off charge of £10 per annum per plan and rebates all the remaining commission to the planholder, usually 0.5%, once a year.

The renewal commission offered by Cavendish Online’s nearest competitor is 0.25% per annum of the plan.

With an initial investment of £5,000 over a ten-year period, an investor can expect an increase of 36% of their total rebate from Cavendish compared to its closest competitors.

This figure increases to 68% with an initial investment of £10,000 and to 94% with an initial investment of £50,000.

Before you commit your money to a stock market ISA, the Financial Services Authority offers various checkpoints. Although some are slightly out of date, the basic concepts hold firm.

• Don’t assume an ISA will be suitable for you just because it features in a so-called top ten ISA guide. The selection in an ISA guide is limited, so the offer may not be the best on the market for you.
• Question anything that you don’t understand. Consult a financial adviser if you need advice specific to your circumstances.
• Find out what the fund invests in and work out whether you are comfortable with the investment risk?
• Some ads appear to offer a very high rate of income or stock market investment with a capital guarantee. If a deal looks too good to be true, it probably is.
• Read the documents, including the list of key features with details of costs and charges.
• Don’t buy a fund based just on the past performance – it may not be doing so well now. If you consider past performance, make sure the figures are up to date.

As for cash ISAs, there are details available on various websites, including moneyfacts.co.uk, Everyinvestor, MoneySupermarket and Moneynet
Some cash ISAs are run through bank and building society branches, some through the post or by phone, and some through the internet, although all have been hit by current low interest rates.

Key factor to consider when buying are:

• How much do you have to invest?
• Some accounts pay higher rates on higher balances.
• Are there any penalties if you later decide to transfer your money to another ISA manager with a better rate of interest?
• How much notice do you have to give to withdraw money?
• Do you want a cash card to withdraw money?
• Are there any minimum amounts you have to withdraw?
• Are there any bonuses if you limit the number of withdrawals you make – or any penalties on withdrawals?