SCHEMES: Just as savers have been immersed in talk of SSIAs in recent months, so have the people providing the accounts in question. Unlike the rest of the population, however, the men and women charged with selling us our savings products can not shut up shop and wait for their free money to stack up over the coming five years. For them, it is time to think of new savers, and dream up new ways of attracting them.
"It's probably a fair comment to say that, in the short-term, there isn't going to be a whole lot of action in the savings market," says Mr Hugh O'Keeffe of AIB.
Mr O'Keeffe acknowledges it is hard to predict where the savings market will go from here, but is optimistic, since "we're living in fairly buoyant times".
He expects, for example, that the soon-to-be-introduced Personal Retirement Savings Accounts (PRSA) could benefit from the savings habit created by SSIAs. In fact, he says, the contribution that the Government will make to the new pensions model (by way of tax relief) is generous even in the context of the SSIA.
"If you sit down and compare the Government side of the two options, the reality is that the PRSA is more handsomely endowed - you get 42 per cent of your €1,000 back by way of tax claim-back."
Mr Quentin Teggin, Bank of Ireland's head of savings and bancassurance marketing, makes a similar point. He also predicts that the take-up of PRSAs will benefit from the SSIA savings habit, if only through "knock-on impact". In general though, he is not expecting to see a rush of activity in the savings market any time soon.
"We certainly see that the SSIA has probably swept up the latent potential in the five-year plus savings market," he admits.
"Five years is a hell of a long time for some people," says Mr Teggin, who suspects there might be a touch of "savings exhaustion" at present.
Mr Teggin firmly believes the whole SSIA experience will succeed in creating a "savings culture" in the Republic however and expects "considerable numbers" will continue to save when the five-year term is complete.
"You have 1.25 million people saving now and many of those have probably never saved seriously before, so it's got to have an impact on enhancing a savings culture in Ireland," he says.
Savers who chose Bank of Ireland as their SSIA provider have followed a number of patterns, according to Mr Teggin. Within the first six months of the products being launched, almost two-thirds of those who signed up were aged over 45, with the bias probably tending towards rural areas.
"We certainly believe that that shifted towards the end," he says. "The average premium also came down."
This meant that until the beginning of March this year, the average amount being saved was €150. As soon as the scheme entered its final month, however, this instalment started to fall, ending up at around €130.
"The average was not much over €100," says Mr Teggin, noting that the last month saw a rush of demand in urban centres. The weather was also a factor. "One day in March, when it absolutely poured, sales dropped," he says.
Ulster Bank's manager of retail marketing, Mr David Beattie, says "never before has there been such an exciting deposit scheme" in the marketplace, but hesitates to predict what kind of long-term effect the SSIA will have on savings. He claims, however, that there will always be a demand for "competitively-priced savings products", regardless of external factors
"There's a new generation of people coming in every day," he says. "The cycle will continue."
