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Special Savings Incentive Scheme.

Dáil Éireann Debate, Tuesday - 1 February 2005

Tuesday, 1 February 2005

Questions (164, 165)

Bernard J. Durkan

Question:

164 Mr. Durkan asked the Minister for Finance his predictions in respect of the expected payout on the Special Savings Incentive Accounts Scheme; and if he will make a statement on the matter. [2864/05]

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Bernard J. Durkan

Question:

165 Mr. Durkan asked the Minister for Finance the full extent of the expected payout under the Special Savings Incentive Accounts Scheme; and if he will make a statement on the matter. [2865/05]

View answer

Written answers

I propose to take Questions Nos. 164 and 165 together.

The Special Savings Incentive Accounts 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.

I presume the Deputy's reference to "payout" is to the total amount that will accrue to investors at the end of the five year period, comprising the capital saved by investors, the investment return on that capital and the Exchequer contribution. I do not wish to speculate on the amounts estimated to be paid out on maturation of the scheme in 2006 and 2007 as the scheme will not begin to mature for more than another year and there are several variables involved.

These include: participants withdrawing from the scheme or varying their monthly contributions between now and the end of the scheme; the eventual accrued investment return, which will vary depending on the interest rate of the financial institution where a particular account is held or on Stock Exchange fluctuations during the entire investment period; and the eventual amount of exit tax to be received at the end.

As indicated in replies to previous questions, it is not possible to give a definitive answer as to the eventual cost of the scheme as it is subject to the variables outlined. The cost of the scheme in 2004 was €548 million. The estimated cost in 2005 is €560 million. This, however, is not a conclusive figure, and the final figure may be different if account holders change their monthly contributions. The total gross cost over the period of the scheme will be reduced by the exit tax to be received at the end.

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