Fergus McNally

Partner and Head of Financial Services Assurance

EY Ireland

Ireland has long been recognised as one of the most educated and entrepreneurial countries in Europe, with an international financial asset management ecosystem that is the envy of the world.

The asset management industry in Ireland is so successful that 15 of the top 20 global asset managers have operations here.

When it comes to building personal wealth, however, Ireland trails many of its international peers. For decades, Irish households have been encouraged to save rather than invest, resulting in tens of billions of euro sitting on deposit while inflation steadily erodes purchasing power.

The Government’s proposed Savings and Investment Account (SIA) scheme represents a welcome and important shift in policy thinking.

The reality is that Ireland has historically been a less attractive environment for retail investors, i.e. households and individuals. Complex rules, high tax rates and the deemed disposal regime have created a significant drag on long-term wealth creation, discouraging ordinary savers from investing in diversified funds and capital markets.

By contrast, countries such as Britain, Luxembourg and Switzerland have built simple savings and investment frameworks that encourage participation and allow households to benefit from long-term compounding.

The proposed introduction of a dedicated SIA in Ireland is about much more than tax policy; it is about changing behaviour and creating a culture of investing for everyone at every income level.

Ireland’s financial literacy challenge is not just a knowledge gap; it is also a policy gap. People are unlikely to engage with investing when the system is overly complex and the incentives are weak.

A simple, accessible investment account has the potential to transform this dynamic. It can help households participate in economic growth, build financial resilience and create wealth over the long term.

Most importantly, it gives ordinary citizens an opportunity to share in the benefits of the world-class asset management industry that operates from Ireland but from which relatively few Irish savers currently benefit.

As policymakers refine the proposal, the priority should be simplicity. If implemented correctly and without being diluted by unnecessary complexity, this initiative could become one of the most positive developments in Irish personal finance for a generation.

Patrycja Jurkowska

Head of Global Finance and ICT

Gorta

The proposed Savings and Investment Account (SIA) is an encouraging development for Irish savers.

With significant household savings, roughly €170 billion, still sitting in deposit accounts – often earning limited returns and subject to deposit interest retention tax (DIRT) – it is positive to see that another route is being considered for people who want to put their money to work more effectively.

Ireland has long had a strong savings culture, but comparatively low levels of direct household investment. The SIA has the potential to bridge this gap by making investing simpler, more accessible and, depending on the final design, more tax efficient. For everyday savers, this could be a meaningful step forward.

The details will matter, however. Tax treatment, contribution limits and ease of use will all determine whether the scheme is genuinely attractive. If it is too complex, or the tax advantages on offer too limited, it may struggle to change behaviour.

It is also important that SIAs are not confused with existing State savings products, including various types of bonds and saving plans.

Those products are designed around capital security. An SIA, by contrast, is likely to involve investment risk. Values can go down as well as up, and there will be no guarantee that capital is preserved.

Overall, the proposal is exciting. If designed well, it could encourage better long-term financial habits and give ordinary savers a practical alternative to leaving excess cash on deposit.

The benefit I am most interested in is the proposal to apply a flat-rate tax to account assets above a set threshold, with providers responsible for administering the tax.

“TAX TREATMENT, CONTRIBUTION LIMITS AND EASE OF USE WILL ALL DETERMINE WHETHER THE SCHEME IS GENUINELY ATTRACTIVE”

Dr Michael Hayden Assistant

Professor of Accounting Maynooth University

MEMBER PERSPECTIVES

Given the significant amount of money held by individuals on deposit in Ireland, the stated objective of the proposed Saving and Investment Account (SIA) scheme – i.e. “putting this money to more productive use”, appears reasonable and is a welcome development.

The scheme has the potential to attract large-scale participation if the incentives are attractive, as this would provide individuals with a greater choice of investment products coupled with the benefit of better long-term returns for savers compared to the historically low rates of interest available on deposit accounts.

However, as with any scheme, the devil is in the detail. At present, there are many unknown features that need careful consideration if the scheme is to be a success.

One of the most important aspects is the tax treatment of investment gains. It is proposed that the scheme will simplify the tax treatment of investment income and introduce one simple flat-rate annual tax. This rate will be a key factor in determining if individuals participate in the SIA.

It is also proposed that tax on investment gains will apply above a tax-free threshold; another important factor in influencing uptake.

Other key features – such as potential annual contribution limits, and which investments would qualify under the scheme – may impact participation.

Further, for the scheme to be a success, a crucial element will be the ease with which individuals can navigate the administrative process. It is imperative that the SIA has few barriers to entry and a straightforward entry and exit process from an administrative perspective, making it accessible to ordinary households rather than tailored towards sophisticated investors.

If this is the case, it could become a very attractive way for individuals to invest in the long term.