New State-backed savings scheme will only be taxed after certain threshold 

Finance minister and Tánaiste Simon Harris. Is expected to say that the overriding intention behind the new scheme is to help ensure people’s 'hard-earned money works harder for them over time'. File picture: Stephen Collins/Collins 

A new State-backed savings scheme will only charge tax on people’s savings when their balance surpasses a certain threshold, Tánaiste Simon Harris will say on Tuesday.

Mr Harris will convene the first Savings and Investment Forum today and is expected to tell stakeholders that people are leaving their “hard-earned savings in low-yield deposit accounts” when they should be putting them in a scheme which ensures their “money works harder for them over time”.

As part of the forum, the finance minister will provide further details on the Government’s plans to develop a Personal Investment Account, which he will argue should make investing “simpler, clearer, and more accessible for ordinary people”.

In a keynote speech at Central Bank Headquarters in Dublin, the Tánaiste will set out some principles of the model being worked on ahead of its expected introduction as part of Budget 2027 in October.

He is expected to say that the overriding intention behind the new scheme is to help ensure people’s “hard-earned money works harder for them over time”. 

The Tánaiste will say that “Ireland still does not have a sufficiently diversified savings and investment culture”.

Too much of people’s hard-earned savings remains in low-yield deposits, where inflation can erode value over time.

The Tánaiste will suggest that the investment accounts should be “simple, accessible, tax-efficient, easy to administer, transparent on fees, and portable across borders where possible”.

He is expected to outline what sources last night referred to as “four guiding principles underpinning the initiative”.

This will include the introduction of an annual flat rate of tax on the money in the account that is over a tax-free threshold. The details of this will be worked out ahead of October’s budget.

This tax could “potentially serve as the sole form of taxation on investments made through the new account”, with all investments made within the account receiving consistent tax treatment. Account providers would be required to administer the tax.

Mr Harris told the Cabinet last week that a capital gains tax will not be applied to income generated through the new Government investment scheme.

The scheme is set to emulate a Swedish savings scheme known as Investeringssparkonto (ISK).

The Tánaiste is also expected to announce on Tuesday that the Department of Finance will run an Expression of Interest process to appoint financial literacy ambassadors.

• Louise Burne is Political Correspondent.