Extensions, round-the-world trips, new cars . . . it's bonanza time as the SSIAs begin to mature this year. Davin O'Dwyer takes stock of some subscribers' spending plans
Imagining what you'd do if you won some money in the Lotto is the whole point of playing the lottery. The few euro you pay for the numbers is the price you pay to dream. From April, however, those windfall fantasies are going to start becoming reality for hundreds of thousands of people across the country, when the special savings incentive accounts (SSIAs) begin to mature. The numbers are pretty staggering, but more than a million people took out SSIAs, and the average payout will be about €13,000. That's a whole lot of little Lotto wins, and a whole lot of people getting to put the daydreams into action.
The dreams are all about spending, of course: spending on cars, spending on holidays, spending on all the good things in life. In the Celtic Tiger era, not to want to spend all your money was a kind of personality defect. If that time had a moral, it was that saving money was for people who live in fear of tomorrow rather than for people who live to enjoy today. For some people, to be called a saver was the worst insult using more than four letters. At any rate, it was quite an achievement by the Government to get people to throw prevailing wisdom to the wind and save. Of course, that same wisdom went, once the five years of saving were up, the country would be overwhelmed by a spending frenzy. The big question Irish business has been asking itself is: what the country will spend it on.
Everybody - from car salesmen to landscape gardeners to estate agents - is eager to get some of that SSIA lucre. Stephen Murphy is willing to act as an intermediary between business and SSIA holders. Spotting a gap in the what will soon be a multibillion-euro market, Murphy set up www.spendyourssia.com, a website that offers ideas on how to spend your cash. Register your interests with the site, be they home improvements, motor cars, foreign travel or glitzy jewellery, and Spend Your SSIA will put you in touch with a range of companies that will help you spend your cash.
"I noticed there was no one place for people to go to see how best they could spend their money," Murphy says. "It's a simple idea, but I wanted it to be a one-stop shop for all your SSIA needs. We aim to give people some ideas and good deals through the site."
Many of the 5,000 people who have already registered with Spend Your SSIA are looking forward to treating themselves to a good holiday. Home-entertainment systems are top of many other shopping lists.
One area that SSIA holders seem to have put a lot of advance thought into is cosmetic surgery. Two of the larger clinics in the country, Harley Medical Group and Advanced Cosmetic Surgery, have both reported increased interest for procedures to be done in April and early summer. According to Ed Towland of the Harley Medical Group: "There has been an upsurge in interest since October. Anecdotally, I'd say about a 50 per cent increase in inquiries. We were expecting extra interest next summer. We planned for extra surgeons and more surgery days, but the inquiries are starting earlier than we had anticipated."
With many procedures costing €5,000-€6,000, it's obvious that refurbishing oneself is becoming as acceptable as refurbishing the house or landscaping the garden.
For the cultured SSIA saver, there is art to be purchased. Niamh McGrath of Graphic Studio Gallery, in Temple Bar, says they are expecting more people to purchase fine art. "We are definitely keen to attract people looking to invest their SSIAs. Financial advisers are recommending investment in property, or further savings schemes, but we want to let people know that art is an investment, too, not just a luxury purchase. An original work by the Irish artist Felim Egan, for instance, might set you back €10,000, but a print from here, one of a series, would go for €1,000. If somebody is looking for something a bit different, art is an investment."
But amid all this anticipated spending and consumption, one trend is increasingly apparent: Irish people have taken to saving. Surveys by the big financial institutions indicate that as the date of maturity approaches, people are scaling back the amounts they intend to spend. To cater for this trend, Stephen Murphy also set up www. investyourssia.com (although at the moment it is a mirror of his original site). "Investment is definitely becoming more popular, with the average spend consistently going down from €10,000-€15,000 to a more reasonable €5,000- €10,000 and about 45 per cent of users saying they want to invest the money," he says.
"Things such as clearing credit-card debt, setting up a pension, getting a mortgage started, education funding for the kids: these are all becoming popular as the maturity date approaches. That macho element, people boasting about how they were going to blow the whole SSIA once they got it, that's definitely gone away. People are looking to get the balance right."
So the whole country might not suddenly be driving Mercs come April, despite what analysts were expecting when the scheme was introduced. Instead, it appears that the SSIA has taught us financial prudence. After all, we can still dream about being reckless with our Lotto winnings.
DAN FOLEY: RELEASING AN ALBUM
"My SSIA won't be done until April 2007. By then €10,000 should be enough to buy some accommodation under a bridge somewhere on the northside; hopefully, something waterproof," jokes Foley, an editor with Yahoo. "I've already created some electro-acoustic home-recorded albums. If I still haven't made any progress getting my music out to the public by then, I'll probably use the dough to promote and distribute my music. It's the sort of thing you could spend as much money on as you like. It's relatively cheap to get the actual product, but it would involve a lot of driving around, trying to convince shops to stock it. So I'll have to find the best way of getting it out there.
"Maybe I'll look into property, but I'll also have to get a new laptop by then for gigging, and other equipment I need for getting together some live shows. All you need really is a laptop, a keyboard and a couple of guitars. And the genius, of course, but an SSIA is no good for that."
RHONDA BARRY: TAKING HER SON TO DISNEY WORLD
Barry, a legal secretary, has a special plan for her SSIA cash. "I've decided to take my five-year-old son, Conor, to Walt Disney World in Florida when my SSIA matures. He has never been on a plane, and I never would have been able to afford to take him if I hadn't done the saving scheme. It matures in September, so probably the following April, when it's not so hot, I'll bring him over. I can't stand roller coasters, though. I'll have to hold the coats. The year after that, when he's a bit older, and if I have any of the money left, I want to take him to Lapland to see Santa."
Like many people, Barry plans to put some of the money into her house. "I'm doing some boring things with the money as well, such as paying off some of a car loan and getting the back garden landscaped. I'm also going to try to keep saving. At first you think, 'I'll never keep it open for five years,' but it flies by, so I'll definitely keep some money in there."
CAROLINE HEALY: RENOVATING A PROPERTY
"Like a lot of people, I got my SSIA at the last minute," says Healy, a 26-year-old project manager for Smart Telecom. "My SSIA won't be ready until 2007. I'm already looking forward to putting it towards renovating a property. Interior design has always interested me, so the idea of buying a place and making it my own really appeals."
Healy believes the SSIA has helped to encourage saving. "It was my first proper savings scheme. I was just out of college, so I didn't have the chance before then. But it's good to start early, because you get into the habit of it. I'd like to try and continue some form of saving, now that I've got used to it."
Besides investing in a property, she intends to treat herself. "Well, I'll always have to go shopping. Also, I'd like to visit Cuba, especially before Fidel Castro dies. Then it's all going to change."
NIAMH MAGINN: GETTING LASER EYE SURGERY
Maginn, a category developer with Superquinn, increased her contributions as the scheme went on. "It's money for nothing, really, so it's hard to turn down. It wasn't my first savings scheme, but it has definitely encouraged me to keep on saving."
Her main plan for the money is to get rid of her spectacles for good. "I've been considering laser eye surgery for a while. As time goes by, it's like buying a house: everybody's doing it. It's a no-brainer in a way. I've been wearing glasses for about 10 years, and contact lenses for about seven, and, every year that goes by, contacts are more annoying and disruptive. And it's not an overly-expensive operation for the impact and effect it has. Also, hopefully, the price will have come down by the time I get my SSIA, in 2007.
"Of course, like most people, I'm looking to get on the property ladder - the sensible thing to do with the balance. There's always the temptation to go travelling, but we'll see. I might use it to finance a trip to Australia."
GLEN FORDE: CHOSE TO SAVE BY HIMSELF
Forde, a 27-year-old consultant engineer and musician from Galway, decided not to get an SSIA. "When the scheme started, I was in college, not especially wealthy, and figured I'd be unable to contribute enough to really benefit. Having what funds I possessed readily available to me seemed more pertinent than locking them away," he says.
"I don't regret avoiding having an SSIA. I fed and clothed myself for those last days of university, and, upon finally entering the workforce, I did some special saving of my own. By still living like a student, I managed to put away a couple of hundred euro a week. By the end of the year I had €6,000 or €7,000 to play with. I quit my job, hung around Australia for a few months, saw a bit of Japan, bought the laptop that I do a lot of work on, and bought a couple of new bass guitars. Without the laptop, I mightn't be doing the interesting work I'm doing now. And without that '78 Gibson I mightn't have played the various gigs I've been lucky enough to play in the past two years...
"I did my own saving, when I could, and enjoyed the rewards on my own time. I might have had a very dull five years waiting for the Government to give me my money back."