At Cantor Fitzgerald Ireland, we see this as more than a headline statistic. It reflects a growing disconnect between how people save and how effectively they could invest over the long term.

Against this backdrop, proposals for a new state‑backed savings and investment framework have brought renewed attention to a question many households are already asking:

How can excess cash be put to work more efficiently, without unnecessary complexity?

While full details have yet to be confirmed, the proposed investment account is expected to emphasise simplicity, transparency and tax efficiency. It could serve as an attractive, albeit higher‑risk, alternative to cash deposits.

Crucially, the proposed scheme is expected to levy a modest annual flat rate of tax on the value of assets held above a defined threshold. As this flat‑rate charge is expected to serve as the sole form of taxation on the account, it would represent a very welcome development, particularly given the high and complex tax treatment currently applied to investments in Ireland.

At present, gains on most investment funds are subject to Exit Tax at 38%, with the eight‑year deemed disposal rule also applying. Investments subject to Capital Gains Tax allow investors to offset gains and losses, but at 33% the rate remains high versus international comparators. A simplified and tax‑efficient investment account could therefore make a meaningful difference in helping households achieve their long‑term financial goals.

Lessons from international schemes

A number of countries have already implemented similar initiatives, and it is reasonable to expect that any Irish scheme would draw on their most successful features. One common theme runs through each example: they make investing feel as straightforward as saving.

• United Kingdom
  Individual Savings Accounts allow individuals to contribute up to approximately €22,000 per year. Interest, dividends and capital gains are not subject to tax, and investors can choose from a wide range of options including cash, equities, bonds and funds.
• Canada
  The Tax‑Free Savings Account permits annual contributions of approximately €5,000. Investment growth and withdrawals are tax‑free, with access to equities, bonds, funds and cash investments.
• Sweden
  ISK accounts allow contributions equivalent to approximately €28,000 per annum, with an effective annual tax rate of just over 1% on the total account value. Investors have access to a broad range of assets including mutual funds, exchange traded funds, Swedish equities and selected global investments.

Across each of these schemes, simplicity, flexibility and clarity have been central to encouraging participation and long‑term engagement. The proposed Irish scheme is likely to be similar to the Swedish model, as discussed at the Savings and Investments Forum held in March.

What will make the Irish scheme successful?

For the Government to deliver a truly impactful initiative, the scheme will need to offer simplicity, flexibility and tax efficiency across investment options. If designed well, this type of initiative has the potential to strengthen the long‑term financial outlook for Irish households, while also helping to ease some of the growing pressure on the State pension system.

Where professional advice becomes essential

While a state‑backed investment account would represent a positive step forward, it should be viewed as one component of a client’s wider financial solution. For many individuals, professional financial advice will remain essential. Important questions still need to be addressed, such as:

• How much should be held in cash and how much can realistically be invested?
• How does this scheme fit with existing savings and investments?
• What level of risk is appropriate to meet long‑term objectives?
• How can tax efficiency be maximised across all assets, rather than within a single scheme?

This is where professional advice adds real value. A well‑structured financial plan can take advantage of a new Government initiative and integrate it into a broader, goal‑driven strategy, ensuring investors are not just participating but optimising their financial decisions.

Ultimately, the impact of any savings initiative will depend not only on its design but on how effectively it is used and integrated into wider financial planning. For those willing to engage thoughtfully, it could mark a meaningful shift towards a more intentional and informed approach to building long‑term wealth in Ireland.