Government Personal Investment Account must target mainstream savers
Risk feels very different when it is your own money. Picture: iStock
If Ireland wants an agile savings account that people will actually use, it must be built on trust, advice and the proven strength of insurers.
Irish people are good savers. But saving and building long-term financial security are not the same thing. Money left for years in low-return current and deposit accounts loses value in real terms when inflation takes hold. That is the issue the Government is trying to address through the proposed Personal Investment Account (PIA) and it is a worthwhile objective. The aim is to help more people invest some of their savings for the long term in a way that is accessible and consumer friendly.
The ambition is right. The real question is whether the PIA will work for the people it is meant to serve. Most people are not thinking about capital markets when they make financial decisions at the kitchen table. They are thinking about the mortgage, childcare, college costs or whether they can put something aside for the future. They want to know where their money is going, what the risks are and who they can trust to guide them. If the PIA is to succeed, it has to make sense in that real-world context, not just in a policy paper.
We should also be honest about the barriers. For many people, the problem is not a lack of interest in saving for the future. It is a lack of confidence in investing. Financial language can be off-putting. Risk feels very different when it is your own money. For first-time investors, access on its own is not enough. People need clarity, reassurance and advice they can understand. The design of the PIA matters every bit as much as the tax treatment.
That is why the insurance sector has to be central to this conversation. In Ireland, insurers and advisers already work with people every day on long-term savings, pensions and protection through regulated, consumer-facing channels designed to protect customers and support informed decisions. If Government wants the PIA to reach beyond a narrow group of confident, self-directed investors, it needs to build on the parts of the system that already know how to support ordinary savers.
That point matters even more when you look at the Irish market in its own terms. There is a strong European push to increase retail participation in savings and investment products, and Ireland is clearly aligning with that wider agenda. But there is a risk in assuming that a broad European model can simply be dropped into the Irish market without adaptation. Ireland is different and policymakers need to start from that reality.
Irish households have not traditionally built long-term wealth through direct share ownership in the same way as some other markets. Here, people have tended to save and invest for the future through pensions and insurance-based products. That is simply the shape of the Irish market and it tells us something important: Irish consumers are far more likely to engage when the route is familiar, structured and supported.
Some of the assumptions in the wider European discussion miss an important point for Ireland. Insurance is sometimes treated as if it is inherently complex, while market-based channels are presented as simpler or more modern. That is too simplistic. The issue is not whether long-term investing involves complexity. The real question is who is best placed to help consumers and make the experience straightforward and understandable. In Ireland, the insurance sector is already set up to do exactly that.
None of this is to say that funds do not matter. They do. Funds will clearly be part of the investment architecture behind the PIA and they are an important part of Ireland’s broader financial services ecosystem. But we should not confuse investment architecture with consumer delivery. Funds are products. Advice is a separate regulated service. What matters for the PIA is not just what sits inside the account, but who sits across the table from the customer and helps them understand it.
If the PIA is designed around the needs of confident, financially literate, self-directed investors, it will miss a large part of the Irish market. The real prize is not simply to create another product. It is to help more mainstream savers take a first step into long-term investing in a way that feels manageable and worthwhile and establish real investment culture and habits in the Irish society. That means designing around trust, guidance and familiarity, not around an idealised investor who is comfortable making unaided market decisions.
The insurance sector already has much of the infrastructure this would require including distribution networks, systems, consumer relationships and a regulatory framework for long-term savings and insurance-based investment products. That matters because it means the PIA can be delivered through routes people already know, rather than through an entirely new consumer model built from scratch. In a market like ours, that is likely to be more trusted, more realistic and more cost-effective too.
Whether someone is in Dunmore, Delgany or Darndale, the basic question is usually the same: can I afford to put money away and can I trust the route I’m using? Most people are not setting out to become investors. They just want a sensible way to put some money aside and get a better return over time. They are looking for a sensible, understandable way to make their money work harder over time. That is exactly why the design and delivery model matters so much.
The debate, then, should not be framed as “safe” saving versus “risky” investing, and it should not become a sectoral contest either. If we want to help households move some of their savings into diversified, professionally managed long-term investments, we need to do it in a way that is transparent, appropriate and easy to understand. Ireland already has an insurance sector with deep experience in doing exactly that for ordinary consumers.
But it will only do that if it is designed for the market we actually have, not the one we imagine. And the market we actually have is one where trust, advice and familiar long-term savings structures matter a great deal.
The opportunity now is to build a PIA that works not just in theory, but in the everyday financial lives of Irish households. That will require a framework that combines investment access with trusted support, clear communication and existing consumer-facing infrastructure. The insurance sector already brings those strengths, and should therefore be placed at the centre of any serious effort to make the PIA work for ordinary savers.
Print copy Designing a Personal Investment Account that works for Irish savers Irish people are good savers. Across the country, households continue to build significant balances in current and deposit accounts because they value security and certainty. After years marked by economic shocks, inflation and uncertainty, that caution is understandable.
However, saving and building long-term financial security are not always the same thing. Money left for years in low-return accounts can lose value in real terms when inflation takes hold. That is why the Government’s proposed Personal Investment Account (PIA) is an important opportunity to help more people put a portion of their savings to work through long-term investment.
The ambition behind the PIA is a positive one. The objective is to encourage greater participation in long-term investing and help households build stronger financial resilience over time. If designed well, it can also support wider economic investment and growth.
The key question is not whether the idea is worthwhile. It is whether it will work for the people it is intended to serve.
For many consumers, the challenge is not a lack of interest in saving for the future. It is a lack of understanding and confidence in investing. Financial terminology can feel intimidating and risk can appear difficult to understand. For first-time investors especially, access alone is not enough and people need clarity, reassurance and support they can trust.
This is where the design and delivery model of the PIA becomes particularly important.
Ireland has a distinctive savings and investment landscape. Unlike some other markets, Irish households have traditionally built long-term wealth through pensions and insurance-based savings products rather than direct share ownership. Almost half of household financial assets are held through pensions and insurance products, while direct participation in capital markets remains relatively low.
That tells us something important about consumer behaviour. Irish consumers are more likely to engage with long-term savings and investment when the route is familiar, structured and supported.
If the Government wants the PIA to reach beyond a relatively small group of confident, self-directed investors, it must reflect that reality. Encouraging people to invest is not simply about creating a product or providing a tax incentive. It is about helping people take a first step with confidence and continue this journey throughout their lives.
For decades, insurers and financial advisers have helped households navigate long-term savings, pensions and protection products. They operate within a highly regulated environment designed to protect consumers and support informed decision-making. They also have established distribution networks, systems and customer relationships that can help bring a new product such as the PIA to a wider audience at speed.
This should not be viewed as a debate between different sectors or between “safe” saving and “risky” investing. Long-term investing has always involved balancing risk and return over time. The objective should be to help consumers access diversified, professionally managed investments in a way that is transparent, suitable to their needs and easy to understand.
The broader economic benefits are also significant. Greater participation in long-term investment can support capital formation, strengthen household financial resilience and contribute to economic growth. But these outcomes will only be achieved if consumers feel comfortable engaging with the product in the first place.
Ireland has a genuine opportunity to strengthen its long-term savings culture through the PIA. Success will depend not only on the product itself, but on how it is delivered. A PIA designed around trust, guidance and existing consumer-facing infrastructure is more likely to attract mainstream savers and deliver meaningful long-term benefits.
If the Government wants the PIA to succeed, it should build on the strengths that already exist within the Irish market and ensure that trusted advice and consumer support remain at the heart of its design.
