Recent figures from the Central Statistics Office show that Irish households saved 12.4% of their disposable income in Q4 2025. At the same time, an estimated €170 billion remains on deposit in Irish bank accounts, much of it earning little or no return. While these figures highlight strong saving behaviour, they also point to a growing disconnect between how people save and how effectively they build long-term wealth.
Few budget measures have generated as much discussion before their official launch as the Government’s proposed new savings and investment account. First signalled by Minister for Finance Simon Harris ahead of October’s Budget, the initiative is designed to encourage Irish households to invest more of their savings. Since then, comments from the Minister and a consultation process involving banks, investment firms and other stakeholders have fuelled considerable speculation about how the scheme will operate.
While many details remain undecided, several key questions are emerging.
How Much Will I Be Able to Invest?
One of the biggest unknowns is the contribution limit. Most international schemes place an annual cap on the amount investors can contribute, and Ireland is expected to follow suit.
Banks and regulators are likely to favour a limit, arguing that a significant shift of money from deposit accounts into investments could reduce a key source of funding for lending. Deposits also play an important role in bank profitability.
For context, the UK’s popular Individual Savings Account (ISA) allows annual contributions of up to £20,000 (approximately €23,000). Some countries also impose lifetime limits on the total amount that can be held within these accounts.
What Tax Benefits Will Be Available?
The tax treatment remains one of the most important unanswered questions.
In countries such as the UK and Canada, investors can benefit from tax-free investment growth, dividends and interest income. Similar treatment is being advocated by parts of the financial services industry in Ireland.
Earlier comments from the Minister suggested a model similar to Sweden’s system, where investors avoid regular capital gains and income taxes but pay a modest annual charge based on the value of their holdings above a certain threshold. However, no final decision has yet been made.
A key consideration will be the impact on tax revenues. Economists have cautioned that generous tax incentives could encourage investors to transfer existing investments into the new structure rather than contribute genuinely new savings, reducing future tax receipts.
Where Will the Money Be Invested?
The proposal aligns with a wider EU initiative, known as the Savings and Investment Union, which aims to channel more household savings into European businesses and economic growth.
However, an important design question remains: how much investment choice will individuals have?
Most international schemes allow investors to access a broad range of global investments, including exchange-traded funds (ETFs), which provide diversified exposure to stock markets, sectors and regions.
Industry groups argue that limiting investments to Irish or European assets could reduce choice, increase complexity and potentially lower long-term returns. Policymakers must therefore balance the objective of supporting domestic investment with the need to offer attractive options for savers.
Will I Make Money?
There are no guarantees. Historically, stock market investments have delivered higher returns than cash savings over long periods. However, markets can experience periods of volatility and losses, as seen in 2022 when both stocks and bonds declined.
For most investors, success will depend on taking a long-term approach. Experts generally suggest investing for at least seven years and paying close attention to fees and charges, which can significantly affect returns over time.
How Much Money Could Flow Into the Scheme?
The answer will depend largely on the final design of the product. While much attention has focused on Ireland’s estimated €170 billion in savings, that figure includes money held by small businesses, sole traders, charities and other organisations, not just households.
Research suggests average household savings are considerably lower than many assume. In addition, a significant proportion of existing deposits are held by older savers who may not be suitable candidates for long-term investment products.
Industry estimates suggest that between €20 billion and €30 billion of household savings could be realistically targeted by the new scheme initially, with perhaps €2 billion to €7 billion invested during its early years.
Over time, however, the numbers could become significant. Based on international experience, assets held within the new accounts could potentially grow to between €50 billion and €115 billion over the next decade. How much of that represents genuinely new investment, rather than money transferred from existing investments, remains an open question.
The Bottom Line
The proposed savings and investment account has the potential to become one of the most significant developments in Ireland’s personal finance landscape in years. However, until the Government confirms the contribution limits, tax treatment and investment options, many of the most important questions remain unanswered.
October’s Budget should provide the clarity savers and investors have been waiting for.
When to ask for Advice
You don’t have to wait . There are plenty of options for money you may already have sitting on deposit, and in fact you might even be interested in an easy access investment!
📞Call us: Dublin Office 01 2330209 / Galway Office 091 399256
📧 Email us: info@derradda.ie