The government is seeking to encourage people to save with the introduction of a new incentive program.
With people spending and borrowing like never before, it seemed like saving had gone out of fashion.
Saving doesn’t seem to be all the rage.
To counter this, Finance Minister Charlie McCreevy announced a new incentive program to encourage people to save more.
For every £ 200 saved, there is a top-up of £ 50 from income.
In the context of special savings incentive accounts (SSIA), the money must be invested for five years and after five years. If a person saves £ 50 per month over five years, the total amount saved will be £ 3,000. Income will add £ 750. The total return after tax and interest included would be £ 4,050, for a total gain of £ 1,050.
Minister Charlie McCreevy says based on anecdotal evidence, people don’t predict a rainy day like they have in the past.
The new regime is expected to have huge public success at a time when interest rates on deposit accounts are very low. However, Fine Gael finance spokesman Jim Mitchell criticized the program, describing it as,
A desperate act of the government.
He criticizes the government’s overall management of the economy and said nothing prevents investors from simply transferring money from other investment accounts.
The minister also introduced new tax exemptions on stock options and new measures to make charitable donations more tax efficient.
An RTÉ News report aired on February 15, 2001. The reporter is Eilis Brennan.