The Government special savings scheme will not have a negative impact on the new personal retirement savings accounts (PRSAs), which will come into effect when legislation currently before the Dail is passed, the Minister for Finance, Mr McCreevy, said yesterday.

Speaking at a Scottish Provident seminar aimed at brokers and independent financial advisers, the Minister said: "In the longer term, I don't see them in conflict. I would accept there is a simplicity about my scheme that is easy to sell but my scheme is only open for a year and people will be in it for five years, whereas the PRSA is an attempt to get more people who are not in occupational pensions into pensions. The PRSAs are into a different market."

Legislation to set up PRSAs was introduced in April. They are intended as a cheap, tax-efficient and frills-free means of access to pension provision.

With the legislation introducing the PRSAs unlikely to be passed until late this year or early next year, the Minister said the savings scheme, which will remain open until April 30th, 2002, would have no real impact on the take-up of the PRSAs. Mr McCreevy said the scheme was not a response to EU criticisms of his economic policies. "If it takes demand out of the Irish economy and that has some minor effect on inflation, so much the better, but the idea was to get people back into the regular habit of saving," he said.

*The Irish Times will assess all special savings incentive scheme products on offer in Business This Week on May 11th and 18th.