Re-investing ISA savers backed

LONDON (Reuters) - The government said on Wednesday it would allow people who had withdrawn savings held in tax-free Individual Savings Accounts at Northern Rock to reinvest their money in other ISAs without any tax disadvantage.

"Under these exceptional circumstances, the Government will allow the people affected to re-invest their money into any cash ISA, including Northern Rock's and thereby restore their tax advantages," said Treasury minister Kitty Ussher.

Thousands of savers withdrew their savings from the mortgage lender last month after news it had to seek emergency funding from the Bank of England. The run on the bank, Britain's first in more than a century, only stopped after the government guaranteed all deposits held at the bank.