A dedicated Irish children investment account is being considered for introduction after the government confirmed it will first roll out a state-backed savings and investment scheme for adults aged 18 and over. Tánaiste and Minister for Finance Simon Harris is publishing details of how the new account will operate this week.
The scheme is a tax-advantaged investment account that allows individuals to hold listed shares, bonds and funds in a single place, with tax administration handled by the provider rather than the investor. The specific thresholds and rates will be confirmed at Budget 2027.
Why the government says Irish savers need a nudge
The backdrop is a striking mismatch between what Irish households save and what they invest. There is approximately €170 billion on deposit in Irish bank accounts, which Harris has described as ‘sitting idle’. According to RTÉ, that figure stood at €175 billion at the end of May, with savers earning an average of around 0.25% on those deposits, a return that has lagged well behind inflation.
Irish households hold just 2.3% of their financial assets in direct investments such as listed shares and debt securities, compared with an EU average of approximately 7.5%, according to figures from the European Union. A large proportion of financial assets instead sits in cash and deposits, 38% in Ireland against an EU average of 30%. The new account is intended to close that gap by making market investment more accessible and straightforward for ordinary savers.
Harris put it plainly: ‘Irish people are good at saving. Every week and every month, people work hard to put something aside to build financial security for themselves and their families. But while we are good at saving, we have comparatively low levels of direct retail investment, and as such people are not getting the benefits of greater returns.’
How the Irish children investment account fits into the wider plan
Under the plans prepared by the Department of Finance, there has been ‘some interest in the concept of an investment account specifically for children.’ The plan states that this concept ‘will be given consideration as part of future finance Bills,’ giving providers time to become familiar with the adult account and develop the required technology before any expansion.
The adult scheme comes first. Irish tax-resident individuals aged 18 and over who hold a Personal Public Service Number (PPSN, a unique identifier used for tax and social welfare purposes) will be eligible to open one account each. There is no minimum contribution, and an annual maximum contribution limit will apply, though the precise figure will be set at Budget 2027 along with the tax-free threshold and flat tax rate.
RTÉ reports that the whole structure is modelled on a Swedish scheme, where a similar tax-advantaged investment wrapper has encouraged broad retail participation in capital markets over many years.
Eligible investments will include listed shares, listed bonds, financial instruments traded on a regulated market, and a range of investment funds suited to retail investors, including exchange-traded funds (ETFs, funds that track an index or basket of assets and trade on a stock exchange like a share). Highly complex or risky products, including derivatives and crypto assets, will be excluded.
One feature designed to remove a long-standing barrier is the abolition of the deemed disposal rule for investments held within the account. Under the existing Irish tax regime, investors in certain funds are treated as having sold and repurchased their holdings every eight years, triggering a tax liability even if they have not actually sold anything. That rule will not apply inside the new account.
There will be no minimum holding period, and account portability between providers will be facilitated where possible on a tax-neutral basis, meaning investors can switch without triggering an unwanted tax charge.
Harris said the aim is to make capital markets feel less remote: ‘Capital markets should not feel like something that is only for people with significant wealth or financial expertise. Equally, nobody should feel that investing is something they have to do.’
The adult accounts are set to become available next year, with the specific tax-free threshold, flat tax rate and annual contribution limit to be announced as part of Budget 2027.
