David Stanton (Cork East, Fine Gael)
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Question 87: To ask the Minister for Finance his views on a new product to encourage people to continue saving after the special savings incentive accounts begin to mature in 2006; and if he will make a statement on the matter. [23102/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The SSIA scheme opened on 1 May 2001 and entry to it closed on 30 April 2002. The accounts mature between May 2006 and April 2007. A total of 1.17 million accounts were opened during the period outlined.

The specific goal of the SSIA scheme was to encourage people to save over a period of at least five years. Its effect has been to stimulate such savings over varying income ranges which is evident in the extensive take-up by many low-income earners. The scheme has been a success in those terms. The scheme has a specific duration. The findings of various surveys undertaken domestically would tend to suggest that, upon maturity, a large portion of the existing SSIA funds will continue to be saved. Therefore, there is much less need or justification to introduce a new tax-based savings scheme.

However, the Government have decided to use the success of the SSIA scheme to encourage a greater level of pension investment. A new pension incentive was introduced in this year's Finance Act to encourage modest-income SSIA holders to transfer part or all of their SSIA savings into an approved pension. The incentive has two features. Firstly, for every €3 of SSIA proceeds reinvested by an eligible SSIA holder in a pension product, the Exchequer will contribute €1 by way of a tax credit. This tax credit cannot exceed €2,500. Secondly, the Exchequer will contribute an additional tax credit to the pension product in proportion to the amount of SSIA transferred into the pension.