Most holders of SSIAs to reinvest funds - survey

More than 50 per cent of the public expect to reinvest some or all of their Special Saving Incentive Account (SSIA) funds, according to a new survey.

The survey by the Irish Insurance Federation (IIF) shows that, as maturity dates approach for SSIAs, consumers plans are starting to become clearer. The survey also shows differences between the age at which people would like to retire and the age they expect to retire.

Some 53 per cent of SSIA owners said that they expected to reinvest some or all of their SSIA funds. However, 19 per cent confirmed plans to spend some or all of these funds immediately, up from 8 per cent in 2004.

Some 68 per cent of SSIA holders said the Government should incentivise the transfer of SSIA proceeds into pensions.

Most people (59 per cent) said that they would like to retire before the age of 55.

"As it approaches, however, there seems to be more realism about actual expected retirement age, with 67 per cent of over 55s expecting to remain in the workforce to age 65 or later," said the IIF.

One in four of workers under 65 (23 per cent) did not know how they would fund their retirement, while 26 per cent expected the State pension to be their main income source in retirement.

Michael Kemp, IIF chief executive, said: "We are concerned at the increased proportion of consumers who plan to spend rather than save their SSIA proceeds. We believe that the opportunity created by the SSIA scheme will be lost if measures are not introduced to incentivise individuals to transfer some or all of these funds into pensions or similar savings products."

The IIF has already proposed to Government that financial incentives are introduced to encourage SSIA holders to reinvest in retirement savings.

The research was conducted by Lansdowne Market Research on behalf of the IIF and took place between March and April. The organisation said a "nationally representative sample" of adults aged 18 and over were included.