Pensions, savings and investment

This week, the Institute 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 a Savings and Investment Account in Ireland. It is intended that legislation will be drafted this year with a view to products being established in 2027. Savings and investment accounts form a fundamental pillar in Europe's Saving and Investment Union proposals to increase levels of investment among citizens. Statistics from the Central Bank of Ireland show that Ireland has a long way to go when it comes to households and individuals investing in capital markets. This week’s announcement has the real potential to increase retail participation in capital markets and empower workers and households to create wealth over their working lives. 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 at its core, with one simple tax applied which is administered solely by the financial provider and not the individual investor. This means there are no reporting obligations placed on the investor and individual transactions are not taxed. As a consequence, investors can focus on making the right investment decisions for themselves. 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. 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 Institute made the point that without financial literacy, the savings and investment accounts will not be as successful as they can be. The Institute also pointed out that the savings and investment account should be seen as one element of a wider reform plan which should include tax reform and the removal of the deemed disposal tax which penalises investors. The Tánaiste indicated that the roadmap on taxation of investment products will be published in the coming months. Chartered Accountants Ireland is hopeful that the roadmap will contain commitments to remove the deemed disposal tax along with other tax measures to improve the overall investment environment in the economy. We will continue to engage with Government on this issue over the coming months including as part of our Pre-Budget Submission.   You can read our earlier response here. You can read about the Investment Tax Guide published in conjunction with Goodbody here.

Cróna Clohisey, Director of Members and Advocacy at Chartered Accountants Ireland, said: “The Forum is an opportunity to advance the recommendations of the Funds 2030 report and to simplify and enhance the tax framework for retail investment, now expected as part of Budget 2026. Together with the anticipated focus on Savings and Investment Union as part of Ireland’s EU Presidency this year, this emphasis on activating hard-earned savings is timely and hugely welcome.  “The Minister’s announcement that the proposed Investment Accounts are being developed with a simplified approach to tax is a positive development. A model based on a low, easily administered annual charge has the potential to reduce complexity and improve accessibility for retail investors.” Grant Sweetnam, Head of Public Policy at Chartered Accountants Ireland, said: “We welcome the strong emphasis placed on financial literacy by the Minister at today’s Forum. Improving understanding and confidence among individuals will be critical to increasing participation in capital markets over the long term. However, it is essential that these reforms are delivered as part of a coherent overall strategy to address fundamental barriers to investment. Addressing wider barriers, including the deemed disposal rule and inconsistencies in tax treatment across products, will be critical to ensuring the full benefits are realised.  “We look forward to engaging constructively with Government and stakeholders at the Savings and Investment Forum and throughout the implementation process to help ensure the roadmap delivers a simple, effective and competitive investment framework for Ireland.”

This week Chartered Accountants Ireland represented members in attending the Cost of Business Advisory Forum run by the Department of Enterprise, Tourism and Employment. The meeting follows the Institute’s submission recently where the focus was on banking, payments and financial services.  We outlined how banking services in Ireland, particularly on the payments side, is behind what is available as standard in other countries.  Competition is essential in moving the dial in terms of banking services and reducing costs for SMEs. We urged both the Central Bank and the Government to recognise that the lack of competition in the banking sector is a drag on the economy and needs to be acted on.    The Institute highlighted the need for the banking sector to move quicker to Account to Account (A2A) payment services.   A2A is an instant payment mechanism which does not need an intermediary card. A2A payments benefit businesses by reducing transaction costs, speeding up settlement and improving reconciliation through real-time data and automation.   At the moment payers end up using credit or debit cards to pay SMEs online and it is the SME that incurs the significant costs of availing of those services. In addition, it is very challenging for SMEs to track who is paying money into their account. This adds to administration cost for SMEs.  In terms of access to finance for SMEs, the Institute highlighted the need for Ireland to deepen the capital markets and improve retail investment in Ireland. We urged the Government to introduce a Savings and Investment Account in Ireland which will encourage workers and households to invest in SMEs.  Following this meeting, the Institute will continue to contribute to the Cost of Business Advisory Forum with the aim of completing a comprehensive report on business costs with important and achievable recommendations for Government.