Hundreds ask about increasing SSIA amount

Many people with Special Savings Incentive Accounts (SSIAs) have been contacting banks and other financial institutions about…

Many people with Special Savings Incentive Accounts (SSIAs) have been contacting banks and other financial institutions about increasing their monthly contributions to the scheme.

The surge in inquiries has been prompted by concerns that the Minister for Finance, Mr McCreevy, could decide to cap the amount they can put into these accounts in the forthcoming Budget in a bid to save Exchequer funds.

"It was hectic with every second call to our head office from customers inquiring about SSIAs," a spokesman for the EBS said yesterday.

The State's biggest bank, AIB, also reported a pick-up in customer queries. Mr Hugh O'Keeffe, AIB marketing manager for savings and investments, expects the queries to increase in the run-up to the Budget.

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"We have seen a pick-up in the last few weeks on foot of the media speculation about possible changes to the scheme," he said.

Bank of Ireland said many customers had been contacting its branches, with some advising the bank to increase the amount of money to be lodged into their SSIA every month.

Some 1.2 million people availed of the Government-backed savings scheme, which gives €1 for every €4 saved in an SSIA over five years.

The scheme closed at the end of April and is expected to cost the Government more than €2.5 billion during the five-year period.

Savers were offered the possibility of placing a maximum of €254 a month in an SSIA. The financial institutions suggest that the average amount saved ranged from €140 to €170 a month.

This would suggest that many account-holders have plenty of scope to raise their contributions.

One institution suggested that if everybody chose to save the maximum €254 a month, it would cost the Government another €1.5 billion, bringing the total Exchequer cost to €4 billion.

By capping the monthly payments the Minister could yield substantial savings, possibly as much as €300 million a year, according to some sources.

It is unlikely that most SSIA holders would opt to pay the maximum €254 a month for the duration of the scheme. Many could decide to raise the next payment so that if the contributions were capped at the amount of their last lodgement, they would still have the potential to yield the maximum return from the Government.