Ulster Bank chief claims SSIAs will create problems for the economy

THE maturity of 1.2 million SSIA accounts over the next two years will create problems for the Irish economy according to Ulster Bank chief executive, Cormac McCarthy.

He believes they will interfere with the natural flow of the economy.

“The Government should never have introduced SSIAs in the first place,” he said, adding that something needs to be done about the “pension time-bomb.”

“The economy does have a natural flow and the pressure created from SSIA accounts will have an impact,” said Mr McCarthy.

Meanwhile, the chairman of the Professional Insurance Brokers Association (PIBA), Tommy Coyne has called on life assurance companies to launch new and innovative products to encourage people to reinvest their SSIA money.

Mr Coyne said the Government should also introduce tax incentives to complement such new financial products.

“The life assurance companies should now be competing with each other in the marketplace to persuade people to invest in their products,” he said.

Mr Coyne went on to say that much thought needed to go into the design of such products, which would have to be easily understood by the members of the public.

They would also have to be relatively simple to operate and not be strangled by over-regulation, which he said was one of the reasons for the poor take-up of Personal Retirement Savings Accounts (PRSAs).

In its pre-Budget submission earlier this month, the Irish Insurance Federation called on the Government to give tax breaks to SSIA holders to encourage them to continue saving.