New savings scheme to boost returns for small investors, Simon Harris says
Simon Harris hosted the first of what is expected to be an annual Savings and Investment Forum at the Central Bank in Dublin on Tuesday. Picture: Grainne Ni Aodha/PA Wire
A new savings scheme will help “grannies, parents, and individuals” across the country who are looking to save small amounts but are not getting a return on their investment, Tánaiste Simon Harris has vowed.
The finance minister hosted the first of what is expected to be an annual Savings and Investment Forum at the Central Bank in Dublin on Tuesday, bringing together more than 300 stakeholders.
Mr Harris is expected to announce a new Personal Investment Account as part of Budget 2027 in October.
The scheme will tax savings only when balances surpass a certain threshold, with the exact details still being worked out.
This tax could “potentially serve as the sole form of taxation on investments made through the new account”, with all investments within the account receiving consistent tax treatment. Account providers would be required to administer the tax.
Speaking to reporters at the Central Bank, Mr Harris said he wants to ensure the account makes it more attractive for people to invest, while also delivering returns on small investments.
“Despite all of the challenges people face, and the figures back this up, Irish people are doing their very best to put away small amounts of money on a regular basis,” the Tánaiste explained.
“I meet these people. I was in a Credit Union in Cork recently. I met a woman called Mary who goes into the Credit Union in Cork every Friday and puts a fiver in each of her five grandkids' credit union accounts every week. She's going to keep on doing that, and she wants to build up a little nest egg for them.
“There are examples of grannies, parents, individuals doing that right across the country.
“But at the moment, despite people doing the right thing, that's not earning any money. It'll be worth less to those grandkids when they go to withdraw it than it is when they put it in.
“That's what we're trying to fix here. People who are trying to maybe save for a deposit, people who are trying to build up their own rainy day, fund their own fiscal buffer.
“We talk about economic resilience at a macro level, and that's important. But if we're actually to build up true economic resilience, we've got to help middle Ireland build it up themselves.”
Mr Harris argued that the current tax system does not work in favour of people saving modest amounts.
He said that the idea has been implemented in other European Union countries and is a “key recommendation of the European Commission as part of the savings and investment union”.
He continued: “At the moment, two of the barriers people face are [that] the tax system is very complex, and you've to make those returns. That's really challenging.
“Secondly, the actual level and amount of tax levied is complex and high as well.
“Simplifying the tax system and simplifying the administration of tax are two key fundamentals. We want to listen, and we want to get this right.”
Mr Harris said he would like to see the savings scheme legislated for as part of Budget 2027 in October, with the accounts available from next year.
- Louise Burne, Political Correspondent
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