Cormac Devlin (Dún Laoghaire, Fianna Fail)
Link to this: Individually | In context

588. To ask the Minister for Finance his views on whether the level of retail investment in the Irish economy should be increased; his views on the way in which Ireland can increase this; and if he will make a statement on the matter. [47012/25]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context

Ireland possesses a high savings deposit rate which reflects the success of our economy for our citizens in recent years. These savings could provide greater returns for individual citizens and the wider economy if they were invested. However, Ireland does not yet have a diversified savings and investment culture, as a large amount of private savings are still held in low-yielding bank deposits. We are not unique in Europe in that regard.

This is the central thrust of the EU’s Savings and Investments Union (SIU) initiative. It aims to help citizens to invest more so as to increase the amount of money they have in their retirement and to use the invested money to grow businesses, thus bringing more growth to the economy.

At the EU level, the European Commission launched the SIU Strategy in March, which includes measures to advance the Capital Markets Union (CMU) project. The SIU (Savings and Investments Union) seeks to increase investment in the economy and promote EU companies’ competitiveness through various measures, such as supporting the development of national capital markets, revitalising the securitisation market, increasing retail investor participation in capital markets, and promoting SME investment. These measures build on those contained within the CMU Action Plan of 2020, which included a number of legislative files, including the Listings Act, ESAP (European Single Access Point) and MiFID II Review, which are currently being transposed. Ireland is a strong supporter of the SIU initiative and is actively involved in its development, including measures specifically designed to promote more retail investment.

At the national level, we are reviewing the recommendations from the Funds Review. On 22 October 2024 ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’, also known as the Funds Review, was published. It was a wide-ranging review of the funds and asset management sector. The report made eight recommendations on the topic of retail investment, including recommendations to better align the tax on investment funds and life assurance products with that of direct equities by removing deemed disposal and aligning the rate of tax to 33%. The report also noted that there may be merit in exploring an incentivised savings and investment account in due course and developments at EU level in the context of the EU SIU will have relevance in this regard. However, the report concluded that measures proposed for amending the existing taxation of investment funds and life assurance products should be prioritised as these address the most substantive issues raised as part of the review.

Under the current Programme for Government, we have committed to progress and publish an implementation plan for consideration in Budget 2026, taking into consideration the Funds Review recommendations, to unlock retail investment and opportunities to grow this sector in Ireland. I should point out that certain recommendations have already been delivered and many others are in progress or and under active consideration.