Savers who withdrew cash from individual savings accounts (ISAs) held at crisis-hit Northern Rock are being allowed by the Government to re-invest their money in any cash ISA with any provider – restoring their tax advantages.
In any one tax year, under current rules, savers can invest a maximum of £3,000 in a mini cash ISA tax-free. So those who had been saving into a Northern Rock ISA for years, and who may have withdrawn large sums of money, would have been limited in how much they could reinvest.
But Kitty Ussher, economic secretary to the Treasury, said last week: "To ensure Northern Rock ISA savers are not penalised by the financial instability in the market, I can announce that in these exceptional circumstances, the Government will allow the people affected to re-invest their money in any cash ISA – including Northern Rock's."
Savers must do this by 5 April, and the announcement applies to funds withdrawn between 13 and 19 September.
Separately, the Building Societies Association said its members had seen record sums flowing into savings accounts – in the wake of the Northern Rock crisis.
Societies had net receipts of £2.8bn in September – almost three times the inflow in September 2006.Reuse content