Brokers Ireland Calls On Government To Implement Funds Review Recommendations Now To Protect Consumers

Press Release

10th March 2025

Brokers Ireland has today called on the Minister for Finance and the Government to speed up implementation of the recommendations of the Funds Sector Review to enable consumers get a better return on their savings and remove the massive tax disincentives that keep propelling people towards bank deposits with very poor outcomes.

The organisation said Irish consumers continue to defy European norms by keeping massive amounts of savings, currently almost €140 billion, in short-term overnight accounts yielding interest rates way below inflation, and eroding value.

Rachel McGovern, Deputy Chief Executive at Brokers Ireland, said the Funds Review published by the Department of Finance in October last recognised this.

“Having done so, there is no rationale for delaying giving effect to these recommendations, which are in line with the objectives of the EU Savings and Investment Union,” she said. ““Waiting for October’s Budget to make the changes would be unfair to consumers and also risks this long-standing and embedded injustice falling prey to the nuances and politics of Budget arithmetic and last minute debate which can sometimes see less deserving causes triumph.”

In a submission to the Department of Finance today, Brokers Ireland points to the Funds Review recommendation that the 1% Life Assurance Levy should be abolished, a commitment also in the Programme for Government 2025. Introduced as a temporary measure in 2009, it is unique to savings made in life assurance policies and has since become “a significant burden on personal investment in life assurance policies,” according to the submission.

The submission also calls for the introduction of an Individual Savings Account (ISA), similar to that operating in the UK.  “An ISA, with tax incentives on income or capital gains from savings up to €20,000 a year would encourage consumers to channel their savings into higher-yielding alternatives,” Ms McGovern said today.

The Funds Review also recognised the need to reduce the 41% tax rate on gains from life assurance savings and investment policies to the Capital Gains Tax rate of 33% applying to stocks, shares and property, she said. “Aligning the tax rate with the CGT rate would prevent market distortions and ensure fair treatment of all investment products.”

In addition to these measures the Brokers Ireland submission proposes an exit tax incentive scheme for responsible investment products. A reduced rate of 25% exit tax on investments in funds complying with ESG (environmental, social and corporate governance) criteria, would stimulate greater adoption of responsible investment among the Irish public, it says.  And it could be revenue neutral or revenue positive by stimulating greater flows from low-yielding cash deposits.

Ms McGovern said these changes would “better harness the wealth of private savings, foster capital for innovation, and ultimately ensure more favourable investment outcomes for consumers.”

Summary of key proposals:

• Abolish 1% life assurance levy
• Introduce UK ISA equivalent for Irish market
• Reduce LAET(Life Assurance Exit Tax) from 41% to 33%
• Introduce lower LAET for ESG funds of 25%/

Ends

Further information:  Rachel McGovern,    Deputy Chief Executive, Brokers Ireland          Tel. 086-8259938

Mairéad Foley, Foley Ryan Communications                                                                          Tel. 086-2556764