An analysis of the Government's special savings scheme (SSIA) has suggested that those who invested in a fixed interest rate SSIA product will chalk up the biggest gains when the scheme ends in 2007.
The study, by actuarial consultants Life Strategies, is being released just over a year on from the closing date of the scheme. It forecasts the likely performance of each SSIA at maturity.
It also estimates that the scheme will cost the Exchequer €2.66 billion by 2007, offset by €240m from a 23% exit tax.
Life Strategies director Dermot Corry says those who invested in equity-based SSIA products are still well ahead of the contributions they have paid themselves, despite falls of around 20% in typical investment funds since April 2002.
The analysis shows that the average SSIA has a market value 9.5% lower than the total contributions paid - by the saver and the Government - but 14% ahead of the amount contributed by the individual saver.
The report finds that fixed rate deposit SSIA accounts are likely to outperform variable rate and equity-based SSIAs. For the average monthly contribution of €158 per account, Life Strategies is forecasting that fixed rate SSIA holders will end up with €12,886 after tax. Equity account holders will finish with €12,459, while variable rate deposit savers will get €12,294.
The report says variable rate accounts have been hit by the fall in euro zone interest rates.
The analysis also suggests that SSIAs have affected other investment areas, with some life assurance companies reporting lower demand. Mr Corry says the new PRSA pensions could be coming to the market at 'the worst possible time'.
