Joan Burton (Dublin West, Labour) | Oireachtas source

I welcome the establishment of the review group. Presumably it will take some time to do its work.

Charges on savings products including life assurance are very high in Ireland. Early on in my time as Minister for Social Protection, I commissioned a study on costs of investment products in respect of people saving for pensions. Compared with other European countries, our costs can be very high. That is something the review group could look at.

I agree with Deputy Michael McGrath that savers, many of whom are saving from pension lump sums, find it extremely difficult to get any decent return. My view and that of the Labour Party is that there should be a product available either through An Post or through the National Treasury Management Agency, which could be a savings bond, for instance. The ideal candidate for the use of a savings bond fund would be housing. I envisage it would permit people to save up to a certain amount, would allow many people to save, especially those on lower incomes, and could be used to invest in housing. It could pay modestly above the current rates of return. For many people who are trying to save for their retirement, interest rates in the Irish market make it almost impossible for them to get any return worth talking about. It is important that the Minister for Finance should facilitate people, especially smaller savers, to do so to facilitate their comfort in retirement and that they can accumulate savings that keep their value. As I am sure the Minister is aware, many savings have a negative return in real terms, perhaps not hugely so but negative nonetheless.

The focus, in finance terms, has been on restoring the pillar banks. As such, interest rates are low and interest charges are high and we do not have the kinds of products that are available in other countries, especially for smaller savers who would not be in a position to pay the fees on other products and who, because of their age are understandably risk-averse. They need deposit-type structures or something very close to that. The review group is a good idea in the context of the economy recovering. It would be good if it was in a position to address those issues.

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