Ireland to Launch New Savings and Investment Scheme

The Irish government, led by Tánaiste and Minister for Finance Simon Harris, is preparing to introduce a new savings and investment account (SIA) aimed at boosting domestic investment and providing better returns for Irish savers. The initiative, a key priority for the upcoming two budgets, seeks to unlock the approximately €170 billion currently held in low-yield bank deposit accounts .

Addressing Low Returns and Limited Investment

Currently, Irish households demonstrate a strong savings ethic, but their funds are largely stagnant, generating minimal returns. Harris acknowledged that Ireland “is lagging behind other countries when it comes to supporting retail investment and long-term savings” . The proposed SIA aims to rectify this by offering a tax-efficient, long-term savings product that invests in assets like shares, bonds, or funds.

European Commission Support and Industry Calls

The move aligns with the European Commission’s encouragement for member states to establish SIAs, which are already available in several EU countries. The Banking & Payments Federation Ireland (BPFI) has actively called for the introduction of a domestic savings and investment account, arguing it would provide a “simple, internationally competitive way to build assets over time” and increase the availability of domestic capital for Irish businesses .

Addressing Disincentives to Investment

The BPFI also highlighted existing disincentives to long-term investing, specifically the 33% capital gains tax rate and tax regulations surrounding Exchange Traded Funds (ETFs) . The new SIA is expected to address these issues, making long-term investment more attractive to Irish savers.

Next Steps and Government Strategy

In the coming weeks, Minister Harris intends to present a strategy to the government outlining the principles and framework for the SIA . This will pave the way for the scheme’s implementation over the next two budget cycles.

Harris Celebrates Irish Business

Speaking at The Irish Times Business Awards, Harris also emphasized the importance of supporting Irish businesses, stating, “We can never take our economy and job creation for granted. In these turbulent times, we must back Irish businesses.”