The SSIA scheme opened on 1 May 2001 and entry to it closed on 30 April 2002. The accounts are due to mature between May 2006 and April 2007 at the end of the five year period. A total of 1.17 million accounts were opened during the period outlined. It was made clear from the start that the cost of the scheme depended on the take-up and that, at its inception, it was almost impossible to predict this. The actual cost of the scheme in its first full year, May 2001 to April 2002, was €198 million. Predicting the cost of the SSIA scheme in any year depends on the behaviour of the individual participants. The actual cost for the latest full calendar year, 2003, was €532 million.
My Department is not aware of any studies which have been conducted on the impact of ongoing saving through SSIAs on the retailing sector. The impact of maturing SSIA funds on consumer demand in 2006 and 2007 is hard to predict and will depend on how the accumulated SSIA savings are spent or saved, how that portion of an individual's income that was previously saved in SSIAs is used, and the extent to which savings are rolled over into other investment products.
The economic effect depends on the state of the economy otherwise in 2007 when the bulk of SSIA funds — around 55% — mature. To date, two reports have been done regarding the impact of the SSIAs, one by Goodbody Stockbrokers and one by Lansdowne Market Research. However, there is no consensus in these reports as to how these funds may be used with both reaching differing conclusions regarding the division between consumption and saving. The ESRI, in its autumn bulletin, did not hypothesise about the likely impact on the economy of the release of SSIA funds because it believes there are too many uncertainties around the likely behaviour of fund recipients.
I have not commissioned any outside study on the impact of the release of the funds. My Department is keeping the issue under close review in the context of the normal assessment of the economic and budgetary position. However, it is important to emphasise that, as the scheme will not commence to mature for another one and a half years, there are many uncertainties regarding the maturity of the SSIAs, which makes the present task of analysing the impact somewhat problematic.
