Bank calls for repeat of SSIA scheme

More incentives are needed to encourage people to continue saving after the 1.13 million Special Savings Incentive Accounts mature, it was claimed today.

New figures revealed four out of five people had never used a savings scheme before taking up the Government’s offer of a 25% bonus over five years.

Bank of Ireland urged the Government to avoid a spending spree with an incentive for consumers to maintain or increase their savings following the maturity of the SSIAs.

“The first SSIAs will start maturing in May 2006 and between now and then, there is a real opportunity for the Government to build on the success of the scheme by encouraging long term savings habits,” Gareth McQuillan, head of marketing at Bank of Ireland Life, said.

However, the Economic and Social Research Institute (ESRI) says the Government should not introduce a follow-up to the SSIA scheme as there is no financial justification.

Research from Goodbody’s Stockbrokers has estimated there will be a €5.2bn spending splurge following the conclusion of the scheme.

The survey carried out by the bank revealed only 24% of SSIA scheme savers had previously saved money on a regular basis before joining the Government scheme between May 2001 and April 2002.

Mr McQuillan said the survey proved the success of the scheme in attracting first-time savers and potentially changing the saving habits of Irish consumers.

The bank said it was a clear message for the Government with 86% of respondents stating a new form of bonus or tax incentives would make them continue saving.

Around 66% agreed that the scheme has made them more likely to continue saving money in the future.

The survey carried out over the last two months found there were more ‘novice’ savers in the 18 to 24 years of age group and among those aged over 55 years of age.

The five-year SSIA saving schemes which will see the Government give €1 for every €4 saved are due to mature in 2006 and 2007.