More than €14 billion will be released into the economy between May 2006 to April of 2007 following the maturing of the Special Savings Incentive Accounts (SSIAs), a report from Goodbody Stockbrokers said today.
This could boost economic growth by almost two percentage points as the 1,170,208 SSIAs generate an average pay-out of €13,673. Economic growth in that 12-month period is facing an expected boost from a forecast 4.8 per cent to 6.7 per cent in 2006.
The Goodbody's report, "Roll out the Barrel", notes that the release of cash is likely to be uneven with 42 per cent of accounts due for maturity in April 2007 because so many account holders left it until the last minute to open an account.
The report suggests that just over a third, or €5.2 billion of the SSIA windfall, will be spent on items such as holidays, cars and home improvements with the remainder being reinvested.
The most likely reinvestment is likely to be in property, the report says.
Some 45 per cent of SSIAs are held by people aged 40 and earning less than €20,000 a year.