Savings scheme to benefit lower income workers unveiled

A new initiative aimed at encouraging more people to save for their retirement was unveiled today as Finance Minister Brian Cowen published the 2006 Finance Bill.

The scheme could be available to half a million workers on lower incomes at a cost of €250m to the Exchequer.

The incentive will see the Government add €1 to every €3 transferred by certain SSIA savers into pension plans.

This bonus will be limited to €2,500 per person.

Mr Cowen said: “On top of that, the Government will also waive the exit tax paid on SSIA monies transferred into such pension accounts, a further top-up to the pension contribution.

“I should emphasise that the scheme is restricted to people at the lower end of the income scale who wish to provide themselves with improved retirement provisions.”

The new pensions scheme will be restricted to workers paying no income tax and those on the 20% rate.

And in a move to revitalise the film industry and lure production companies to Ireland, the minister also revealed that tax relief would be raised.

The percentage of budgets eligible for tax relief will be increased to 80%, up by almost 25% in some cases.

The Finance Bill will be debated in the Dáil next Tuesday and also confirms the Government’s commitment to ensuring that the country’s highest earners can no longer avoid paying any tax.