46% of SSIA funds to remain invested - CSO

Less than one-third of the money maturing from Special Savings Incentive Accounts (SSIAs) will be spent on consumer items, according to the latest figures from the Central Statistics Office (CSO).

The consumer survey found that 31 per cent of SSIA funds will be spent on items such as home improvements, holidays and cars.

Almost half - 46 per cent - of the €1.6 billion maturing from SSIAs will be remain invested in savings accounts, pensions products or other investment products, while about 10 per cent will be used to repay debts.

The results are based on answers given in the quarterly national household survey, conducted in the final quarter of 2005. The CSO found that more than two-thirds of SSIA holders were making the maximum contribution of €254 a month in the fourth quarter of 2005. The average monthly contribution to SSIA accounts stood at €217.

Almost three-quarters of people classified as "professionals" held an SSIA. Some 47 per cent of those in employment held an SSIA, while 16 per cent of unemployed people had an SSIA.

Bank of Ireland Life yesterday urged SSIA customers to continue their savings habit beyond the end of the five-year term, but it cautioned that a new Government incentive for reinvesting SSIA money in pensions would not suit everyone who qualifies.

SSIA holders who earn less than €50,000 have three months from the date their SSIA matures to avail of the pensions incentive of €1 for every €3 saved, up to a maximum bonus of €2,500. But for higher rate taxpayers, the traditional tax relief on pensions contributions is a better deal.

"We are worried that the short window period to avail of the SSIA pension incentive, coupled with the volume of SSIA-related messages currently in the media, will... confuse the customer," said Kevin Manning, head of marketing at Bank of Ireland Life.