Last week, the Institute’s Head of Public Policy, Grant Sweetnam attended the inaugural Annual Savings and Investment Forum held at the Central Bank. The Tánaiste and Minister for Finance, Simon Harris T.D. addressed the Forum announcing his intention to introduce an Investment Account for Ireland. The Government intends to legislate for the Investment Account this year and for accounts to be offered from 2027.
Savings and investment accounts form a fundamental pillar in Europe's Saving and Investment Union proposals to increase levels of investment among citizens. In Ireland, nearly €170 million in household deposits is held in low return deposit accounts which diminish in terms of purchasing power over time.
The savings and investment account proposed by the Tánaiste is similar in nature to the Swedish model which was first introduced in 2012. Simplicity is central in the proposal with a proposed annual flat rate of tax to be applied and administered entirely by the financial provider rather than the individual investor. As a result, investors have no reporting obligations and individual transactions are not taxed.
At the Forum a strong emphasis was placed on financial literacy. Improving understanding and confidence among individuals will be critical to increasing participation in capital markets over the long term. The Institute made the point that without financial literacy, the savings and investment accounts will not be as successful as they can be.
The Tánaiste also indicated that the roadmap on taxation of investment products will be published in the coming months.
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