SSIA savers urged to examine pensions options
The Financial Regulator today urged people with maturing SSIAs to consider using their SSIA money to start or top up their pension.
Research carried out by the Financial Regulator shows that only 3 in 100 people plan to use their SSIA to save for their retirement.
SSIA savers who earned €50,000 or less in the tax year before their SSIA matures can qualify for the once-off government pensions incentive.
To get the government bonus, people must invest some of their SSIA money in a pension within three months of their SSIA maturing, for a minimum period of one year.
Savers who are not eligible under the rules of this incentive, for example, those who earned over €50,000, can still use the funds from their maturing SSIAs to improve their pension provision.
Consumers should seek independent advice on the best way to use their SSIA lump sum to build up their savings for retirement, whether or not they qualify for the incentive.
Consumer director, Mary O'Dea said: "This incentive will be a good option for some people, particularly if you do not have a pension or you want to top-up your pension with a lump sum.
"It is especially attractive for those on the lower tax rate, as they do not benefit as much from existing tax relief on pension contributions."
"For every €3 you invest in your pension, the Government will contribute €1, up to a maximum of €2,500. This means that if you invest €7,500 of your SSIA in your pension, the value to you will be €10,000 - that is certainly worth considering.
"In addition, you will receive a refund of some or all of the tax you paid when your SSIA matured, depending on how much you invest in your pension."
"Since SSIAs started to mature, increasing numbers of consumers have called our help-line looking for information on the Government pensions incentive and general information on how to go about using their SSIA to save for their retirement," she added.
