Special Savings Incentive Accounts will inject some €14 billion into the economy on maturity and boost economic growth by almost two percentage points. This is according to a study by Goodbody Stockbrokers, which estimates the average pay-out from the scheme will be just over €13,600.
'Roll out the barrel' is the title of Goodbody's report on the likely economic impact of the SSIA scheme, and it looks like the barrel will have quite a roll.
A total of €14 billion will be released into the economy over a 12 month period from May 2006 to April of 2007. Because many people left it until the last minute to take out an SSIA, an incredible 42% of accounts or €6 billion will be released in April 2007 alone. The average pay-out is expected to be €13,673.
Using an opinion poll survey, Goodbody's reckons that some €5.2 billion or 37% of the money in SSIA accounts will be spent with the remainder being invested. The biggest investment is expected to be in property.
This massive injection of money into the economy is likely to boost economic growth from a forecast 4.8% to 6.7% in 2006.
The study also finds that 45% of the accounts are held by people earning less than €20,000 a year. The average account holder is 40 years old. They are expected to spend €1.6 billion on holidays, €1.1 billion on car sales and €1.3 billion on home improvements.