15th March 2005

By Jonathan Carr - The Synergy Group

Important Article For Anyone With An SSIA

Something to be aware of when your SSIA is ending. It would be unfortunate to trip up on a technicality at the end...

Anyone who has an SSIA account needs to read this article by Orla O' Sullivan published on the 3rd of February 2005 in the Irish Independent. Basically it states that you need to go to your Bank and ask them for a disclosure notice three months before the savings term ends, if you don't have this disclosure notice you will lose all the interest the Government was going to give you as well as the interest from the Bank! If you know of anyone who has an SSIA please let them know about this.

Beware of losing your SSIA bonus

Below is the article by Orla O'Sullivan

Thursday February 3rd 2005

THE Government bonus given to investors in the Special Savings Incentive Accounts (SSIAs) could be lost if they fail to fill out a disclosure notice three months before their savings term ends, bank executives warned this week.

The first batch of the 1.2m SSIA accounts will mature in May 2006, meaning those account holders must have their declaration forms in by March 1 next year, said Brian Forrester, managing director of Bank of Ireland Life.

"This is a very important piece of paper," he emphasised, speaking at the release of BoI research into SSIAs earlier this week.

A saver who fails to comply with that technicality could be penalised at the last minute as if they had pulled out of the SSIA during the mandatory five-year term.

By incurring a 23pc tax on both principal and interest, it would be as if they never got the 20pc government top-up on their contributions - the very thing that drew so many into the scheme (46pc of BoI respondents).

Less than 10pc of people have pulled out of the SSIA scheme whereas "over 30pc" discontinuation is typical for savers, Mr Forrester said.

The declaration attests that the SSIA account holder was resident in Ireland for the full term, did not borrow the funds contributed, etc.

"There's a real need for advice," Mr Forrester added. Most (76pc) of the SSIA participants said they were saving for the first time.

Since 85pc of the 400 BoI customers polled said that making their SSIA payments "presents no financial difficulty", savers were urged to increase their contributions to the maximum of EUR254 a month. The closer you are to the end of the savings term, the more the top-up is worth, said Gareth McQuillan. You get the Exchequer's 20pc without having to wait five years for it.

"If you put in EUR100 in the last month, at the end of the month it's worth EUR120, before you count interest," he said.

After interest and minus taxes, those who paid in the max of EUR15,000 are likely to net about EUR19,000 at the end of five years - if their SSIAs were invested in equities, which now are outperforming deposit-based SSIAs, he said.

Orla O'Sullivan

If you have an SSIA you should take note ! < http://www.cashelcreditunion.ie/ssia.html >