SSIAs have added €1bn to value, says report

SPECIAL Savings and Investment Accounts (SSIAs) have added a further €1 billion to their projected final value, according to a report from actuaries, Life Strategies.

They estimate the final value of the special savings schemes at over €16 million up from the figure of €15m published in August.

The Government stands to take €400m through the 23% exit tax on interest earned on the accounts, the report said.

In a separate assessment Bank of Ireland yesterday produced figures confirming equity-based investments continue to deliver better returns than both variable and fixed rate deposit SSIAs.

While equity-based products opened later they are showing the strongest out-performance over their cash equivalents, it said.

BoI's bi-monthly SSIA Performance Indicator said at this point the returns on equity SSIAs opened towards the beginning of the scheme are yielding 7% more than fixed rate deposit SSIAs.

It transpires equity SSIA holders, who began saving towards the end of the scheme in April 2002, continue to benefit more from the equity out-performance.

Life Strategies report also notes that equity-based accounts will produce the highest returns, and have moved further ahead of fixed and variable rate deposit accounts over the last six months.

It says that while all account holders have benefited from returns of 10.5% to 14.4% a year, those who waited until the end of the scheme to open equity accounts will fare slightly better.

Those who opted for equity-based savings products will get the highest returns overall, helped by strong growth in stock markets.

For an account with a monthly contribution of €158 before the Government bonus, the study projects a total of €13,586 at maturity in April 2007. That's €700 more than a similar fixed interest rate account, and €1,244 more than a variable rate account.

Some 93% of the 1,170,208 SSIAs taken out are still open.

Overall contributions have increased despite the number of accounts falling.