An SSIA-style scheme could significantly boost interest in pensions, new research has claimed.
According to a study carried out by Irish Life, switching from the current tax arrangement on pensions to a "bonus" payments scheme similar to the special savings accounts could more than double take-up of pensions.
"Our research indicates that if the Government simply changed the way they rewarded people for saving for pensions, that they could transform the appetite for pensions," said Brendan McEvoy, marketing manager with Irish Life.
"Under the current tax scheme, just 21 per cent of people with no pension provisions indicated that they were extremely or very likely to start a pension this year. However when we suggested that the Government move from the current tax arrangement to an SSIA-style Government payment to match the savings been made privately, the figures leapt to 54 per cent."
The SSIAs are due to begin maturing this year, but Irish Life experts aren't expecting to see the major payday until April 2007 and have warned against the hype surrounding the accounts' maturity in 2006.
"Despite what many people might suggest, 2007 will be the more significant year for SSIA maturities," said McEvoy. "Over 57 per cent of all the SSIAs undertaken will in fact mature in one month - April 2007. This year by contrast just 31 per cent of SSIAs will mature in the eighth months between May and December."
In the coming year, Permanent TSB is expecting another bumper year for mortgages, despite an anticipated half percentage point rise in interest rates by the European Central Bank. House prices are expected to rise by up to 8 per cent during 2006