Elaine Loughlin: Can Simon Harris succeed in changing Irish mindsets on saving? 

So far, the general idea of a PIA as suggested by the finance minister has been broadly welcomed

At the end of March Simon Harris held the first annual savings and investment forum as way of sounding out stakeholders as he announced he would be developing a scheme to address a generally cautious attitude, by simplifying and demystifying the world of investing. File picture: PA 

Simon Harris wants us all to become investors.

The Tánaiste and finance minister, a man not afraid of sticking his neck out for political gain, is now strongly encouraging us to take risks when it comes to our own finances.

Harris has repeatedly expressed concerns around the €170bn of savings currently gathering very little interest in Irish bank and credit union accounts. Investing in stocks, shares and other more uncertain but generally lucrative investments, he believes, will provide much greater returns and would also stimulate the economy.

He breadcrumbed a few more details of his upcoming Personal Investment Account (PIA) with the publication of a 30-page document this week, but many of the crucial details are being held back for a grand reveal on budget day, unless of course more snippets happen to appear in the media before then.

So far, the general idea of a PIA has been broadly welcomed.

Irish people have traditionally chosen to invest any extra cash they had in housing or a traditional savings account, it means that households here hold just 2.3% of their financial assets in direct investments, such as listed equity and debt securities, compared to the EU average of 7.5%.

Ireland also has one of the lowest levels of direct holdings in investment funds in the EU, at just above 2.2%, according to research carried out by Accountancy Ireland. This is despite being an international financial hub and one of the largest global centres for investment funds, with over €5 trillion in assets under management domiciled here.

With this in mind, Harris has been working on the new account for quite some time.

At the end of March, the Fine Gael leader held the first annual savings and investment forum as way of sounding out stakeholders as he announced he would be developing a scheme to address a generally cautious attitude, by simplifying and demystifying the world of investing.

After the forum, he told reporters that the scheme would be aimed at middle Ireland, those who have just enough to put a little away.

“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,” he said.

It is clear that Harris is putting considerable political capital into his PIA.

Changing hearts and minds on what has been a very conservative culture around money could become his legacy.

But Government officials have been keen to stress that the PIA will be nothing like the highly popular SSIA scheme rolled out by Charlie McCreevy in May 2001, which saw the state top up accounts by one euro for every four euro invested.

Irish people have traditionally chosen to invest any extra cash they had in housing or a traditional savings account, it means that households here hold just 2.3% of their financial assets in direct investments, such as listed equity and debt securities, compared to the EU average of 7.5%.

This time around the Department of Finance is using changes to taxation as the carrot to lure people into investing.

Essentially, if a person choses to invest the State will tax them less, and this will be administered through a simplified regime.

The broad parametres of the PIA plan have been set out.

The new investment account will be available to Irish tax-resident individuals aged 18 and over who hold a PPSN, with one account permitted per person.

The account will have a tax-free threshold, when a person goes above this limit a low flat rate of tax will be applied annually to the value of the account above that threshold.

Account holders will not have to invest a certain amount each year, but an annual maximum contribution limit will apply.

In a bid to entice people to take their money out of regular savings accounts, the existing investment tax
regime, including the deemed disposal rule, will not apply to investments held within the investment account.

Currently, investors see their gains taxed at a rate of 38% every eight years, even if they do not sell stocks or withdraw their investments.

Under the changes, qualifying providers will calculate, report and pay any tax due to Revenue on behalf of the investor.

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Eligible investments will include listed shares, listed bonds, financial instruments traded on a regulated market, and suitable investment funds, including ETFs. However, highly complex and risky products such as derivatives and crypto assets will be excluded.

Harris’ PIA move is part of a broader push at EU level.

The savings and investments union (SIU), launched in March 2025, aims to address the fact that just a fraction of household wealth across the bloc is held directly in capital markets instruments.

This matters, as a fragmented and underdeveloped capital market system hinders economic growth, productivity, and innovation.

With bank lending still the main avenue open in the financing of business activities, accessing funds to scale up can be difficult for emerging companies, especially those in areas that have a high risk, high return profile, such as the green economy.

The European Investment Bank has strongly argued that closing the gap in finance for scale-up companies is essential if the EU is to maintain its edge in technology and thrive amid the green and digital transitions.

A 2024 report found that European innovators grapple with significant constraints when seeking investment, particularly as they transition from startups to growth-stage companies.

This often compels promising firms to seek financing abroad, or even relocate their operations overseas.

Deepening capital markets by coaxing savers to take their idle money out of household savings accounts is therefore key.

PIA a 'first step'

Harris is now banking on his PIA becoming a simple tool that allows more people to choose to invest some of their extra cash in capital markets.

He has said that the rollout of the account will be an important first step, but it does not end the work he intends to carry out in relation to retail investment taxation.

“The current system is complex and that complexity can itself act as a barrier to people who choose to invest.

“We will now continue the work on the wider regime, including the rate of taxation, deemed disposal and the administrative burden facing investors.

“My ambition is to build a system that is simpler and easier to understand, where people know what their options are and can make informed decisions based on their own circumstances.”

As always, the devil is in the detail. The success and take-up of Harris’ PIA will depend on three main elements that still have to be confirmed on budget day: How much will a person be able to deposit each year? At what limit will the tax-free threshold be set? And, What rate of tax will a person pay on any investment over the tax-free threshold?

• Elaine Loughlin is Political Editor.