The Government’s proposed personal investment account has the potential to offer a simpler, more accessible and more tax-efficient route into long-term investment, according to Adrian Moynihan, head of consumer banking at AIB.
“Ireland already has a strong savings culture,” he says. “Cash savings remain essential for everyday expenses, emergencies and near-term commitments, while deposits also support lending into the Irish economy. The opportunity presented by the personal investment account is not to replace saving, but to give people an additional option for money that can be committed towards longer-term goals.”
Those goals will differ from person to person, he adds. “They may include buying a home, supporting education, preparing for later life or building greater financial security. For money that may not be needed for five, 10 or 15 years, investment can offer the potential for it to work harder over time. It’s so important that customers come to the scheme with a longer-term mindset, as all investment involves risk and volatility over shorter periods.”
Moynihan believes the personal investment account could help address some of the complexity that has traditionally discouraged people from investing. By combining straightforward access, a simplified tax structure, a broad but regulated range of investments and provider-managed administration, it could provide a practical bridge between keeping all long-term money in cash and navigating the existing investment system independently, he notes.
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“A simpler tax framework will be central to the account’s appeal,” he adds. “The account will include a tax-free threshold, with a low flat annual tax rate applying to the average value above that threshold. The account is intended to make it easier for people to begin investing. There will be no minimum contribution, enabling customers to start with a modest amount and build confidence over time.”
Eligibility will initially be broad and straightforward. The personal investment account will be available to Irish tax-resident individuals aged 18 or over who have a PPSN, with one account permitted per person. There will be no minimum holding period or lock-up requirement, meaning customers can access their money when needed, subject to the value of their investments at that time.
Customers will have access to a regulated range of investment choices. Eligible investments are expected to include listed shares and bonds, regulated financial instruments, suitable investment funds including exchange-traded funds, and insurance-based investment products. Crypto assets and derivatives will be excluded, and the framework will not impose geographic investment restrictions.
Administration should be simpler for the customer. Providers will calculate, report and pay any tax due to Revenue on the customer’s behalf.
A broad provider framework can help make the account widely available. Eligible providers are expected to include MiFID (Markets in Financial Instruments Directive) authorised firms, regulated fund managers, insurers and relevant EEA (European Economic Area) authorised providers.
“AIB welcomes this approach and the opportunity to support customers who want to consider investing as part of a wider financial plan,” says Moynihan.
“A co-ordinated financial literacy campaign will be essential to the account’s success, helping customers understand the difference between saving and investing, assess risk and time horizons, and make informed decisions that reflect their individual circumstances and long-term goals.”
Advice will be particularly important for customers who are new to investment. “Recent nationally representative research conducted by Amárach Research on behalf of AIB found that 81 per cent of adults had not sought financial advice in the previous three years, including 57 per cent who had never done so,” he points out. “The same research found that six in 10 parents lacked a clear plan for funding their children’s education. While education is only one possible goal for investment, the findings illustrate the wider need to help people turn long-term ambitions into clear, affordable plans.”
The account will work best when it forms part of a balanced approach, Moynihan continues. “Before investing, customers should retain accessible savings for emergencies and near-term costs, identify their objective and time frame, assess what they can afford to contribute and understand their attitude to risk. The first step should always be a plan rather than a product.”
AIB National Savings Week, which runs until Friday, October 16th, should therefore be about more than encouraging people to hold more cash, he adds. “It is an opportunity to promote purposeful saving, informed investing and earlier engagement with advice. The personal investment account could give people a clearer route to put long-term money to work while retaining the protections, transparency and support needed to invest with confidence. As we celebrate National Savings Week, customers can learn more about the range of savings and investment options available to help them achieve their financial goals.”
Every AIB branch has a dedicated savings and deposit adviser who can help customers with any initial questions on the personal investment account and their wider savings needs.
“As a bank serving around half of the Irish retail market, AIB has both an opportunity and a responsibility to make investing more accessible,” says Moynihan. “Our intention is to offer customers a seamless digital route to open a personal investment account, without the need for a lengthy advisory process for straightforward set-up, helping them translate Ireland’s strong savings culture into long-term investing habits. Customers who require more tailored guidance can also meet with AIB’s Financial Planning team in branch, by phone or via video call to explore how personal investment accounts and other savings, investment, protection and pension solutions may fit into their overall financial plan.”
