Just the Facts | Savings and Investment Union 

Household savings across the EU are estimated at €10 trillion – at a time when Europe requires significant investments to meet global challenges. The European Commission’s proposed Savings and Investment Union (SIU) seeks to expand investment opportunities for citizens while strengthening access to finance for European businesses. This Just the Facts outlines the key features of the SIU and the Irish Government’s complementary initiative for a Savings and Investment Account (SIA).

Background: Savings in the EU

The EU has spent more than a decade working to deepen and integrate the single market for capital. The European Commission published its Capital Markets Union (CMU) Action Plan in 2015, which laid out measures to create a single market for capital. The Commission published a subsequent CMU Action Plan in 2020, acknowledging that despite progress, various structural barriers remained. Despite the successive Action Plans, according to the President of the European Central Bank Christine Lagarde, financial integration across Europe is lower than before the financial crisis.

The launch of the Savings and Investment Union (SIU) by the European Commission in March 2025 represents a renewed effort towards financial integration in Europe. Building on the previous CMU initiative, the SIU is more focused on citizens and their role in the financial system. The SIU is not only about markets and institutions; it is about how Europeans save, invest, and build financial security over time.

Structural imbalance: high savings, low investment

There is a large volume of household savings across the EU: an estimated €10 trillion of household savings are currently held in bank deposits, which provide security and liquidity but typically generate relatively low returns for savers, particularly when inflation is taken into account. European Central Bank data shows that only a fraction of EU household wealth is held directly in capital markets, where the potential returns could be higher. European households save an average of €1.4 trillion per year – nearly double the amount saved in the United States, but of this, about €300 billion is invested in foreign markets outside Europe. According to the Central Statistics Office, Irish households are saving an average of €2 billion a month.

At the same time, there is a growing need for investment in the EU, as it faces significant challenges such as the transition to a green economy, the expansion of digital infrastructure, and the need to remain globally competitive – all of which require significant and sustained capital. The European Commission’s Competitiveness Compass released in early 2025 and the Draghi Report in September 2024 identified an annual investment need of €750 to €800 billion by 2030 to modernise Europe’s economy. European businesses – especially small and medium enterprises, as well as more innovative firms – often struggle to secure financing, particularly when it involves higher-risk or long-term investment. The lack of venture and risk capital in Europe presents significant challenges for tech and other startups seeking to scale up and compete with the US and China.

This creates a persistent imbalance in the EU: on the one side, there is a large pool of underutilised savings, and on the other, a demand for investment that is not being fully met. The SIU is designed to address this mismatch by encouraging a greater share of savings to flow into capital markets, where it can support business investments and the broader economy.

Enabling citizens to invest

At present, only about 24% of Europeans – and 18% of Irish citizens – invest their money, whether in shares and bonds or indirectly through funds, pensions, and insurance products. Barriers include concerns over risk, limited financial knowledge, and the perceived complexity of financial products. These personal factors are compounded by a lack of guidance on investment strategies and an unattractive tax regime. In some cases, the available products themselves may not be well suited to first-time or small-scale investors.

The basic aim of the SIU is to create better financial opportunities for EU citizens, while enabling the European financial system to connect savings with productive investments. EU citizens should be able to allocate a portion of their savings into productive investments, which would also help to finance the EU’s objectives, such as the transition to a greener economy. A more integrated financial system could also support the development of European technology firms and reduce their dependence on external sources of capital, such as funds from the US.

Another key objective of the SIU strategy is to ensure financial security for EU citizens by enhancing supplementary occupational and personal pensions to complement state pensions, which in many contexts will be insufficient to support adequate living standards, and promoting auto-enrolment in pension schemes. Given that the gender pension gap between men and women in Europe currently stands at 24.5%, supplementary pensions are particularly important to women.

While mainly targeted at citizens and businesses, the SIU is also relevant for philanthropic organisations and foundations that invest in entrepreneurs and start-ups in the social economy. However, they currently face obstacles in their cross-border work, such as discriminatory tax treatment, complex procedures, difficulties in accessing banking services, and restrictions on foreign funding. In this context, the pan-European philanthropy association Philea called on the European Commission to ensure a fair and level playing field for organisations working for the public good under the SIU. In its proposal from March 2025, the European Commission acknowledges the importance of maintaining “a constant dialogue with civil society organisations that promote equality and financial inclusion, as well as with youth organisations to ensure that the Savings and Investments Union is designed to benefit all EU citizens”.

Irish Savings and Investment Account

Irish households hold just 2.3% of their financial assets in direct investments such as listed equity and debt securities – well below the EU average of 7.5%. Where Irish households do hold financial assets, these tend to be indirectly in occupational pensions and life insurance. A significant share of household wealth is tied up in property. Crucially, as of February 2026, almost €172 billion sits idle in low-yield deposits in Irish banks. The participation of Irish consumers in financial markets is therefore very limited.

As part of the SIU framework, the European Commission adopted a Recommendation on increasing the availability of Savings and Investment Accounts (SIA) in Member States in September 2025. The Commission describes SIAs as a special type of account designed to complement everyday bank or savings accounts, which could enable citizens to achieve higher returns on their savings while also helping to finance EU businesses, in turn supporting economic growth and job creation. With a minimal monthly contribution, SIAs enable individuals to invest in financial products in a simple and accessible manner. They are often underpinned by attractive tax rules and benefits, allowing investors to retain a greater portion of their returns.

In February 2026, the Irish Government announced that it had begun to work on a SIA in Ireland, which should be ready to introduce with the new budget in October 2026. According to Tánaiste Simon Harris, an Irish SIA should be as flexible and low-risk as possible. However, it remains to be seen precisely what form this will take: the Irish Department of Finance initially identified Sweden’s Investeringssparkonto (ISK) as the preferred model for the Irish scheme, but later amended this position, saying that it would not directly “copy another country’s model”.

Financial literacy as a foundation

Access to investment products is a first step but is not sufficient on its own; citizens also need the knowledge and confidence to make informed decisions. Improving financial literacy – which the OECD defines as “the financial awareness, knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve individual financial well-being” – is therefore seen as a critical enabler of the SIU. This means not only formal education, but also clearer communication from financial institutions and more user-friendly product design. This is reflected in the European Commission’s Financial Literacy Strategy, which underlines the importance of financial literacy both for improved participation in retail investment markets and for navigating increasing digital financial services and products.

A Eurobarometer survey in 2023 showed that financial literacy levels in Ireland are broadly in line with or even higher than the EU average, with 88% of adults demonstrating at least a moderate level of financial knowledge. Of those, 31% have a high level of financial understanding. According to Ireland’s first National Financial Literacy Strategy, launched in 2025, six out of ten adults in Ireland have adequate financial literacy.

While an SIA is designed to be inclusive for everyone, it is particularly aimed at those who have been previously reluctant to invest. Improving financial literacy with a focus on investing in capital markets will therefore be a vital component of the SIA rollout. Targeted supports will be especially needed for demographic groups with the lowest financial literacy, as identified by the European Commission – namely women, young people and older adults.

The example of Sweden, which has offered its national ISK account since 2012, shows that a higher proportion (45%) of account holders have third-level education, compared to 17% with only primary education. Even within the same income group, the likelihood of holding an ISK account increases with education level. This underscores the importance of making an SIA accessible to individuals across all education backgrounds in order to avoid reinforcing existing inequalities.

Next steps towards an SIU

Implementing the SIU will rest on both legislative and non-legislative measures, as well as measures to be developed by the Member States themselves. The European Commission intends to publish a mid-term review of progress towards the SIU in the second quarter of 2027. Ultimately, the success of the initiative will require collaborative efforts from all stakeholders, including the Member States, European Parliament, private sector and civil society, and will depend on uptake by citizens.

In February 2026, Taoiseach Micheál Martin stated that Ireland was ready to move ahead with the SIU. This followed earlier concerns about how greater centralisation of financial supervision at EU level could affect Ireland’s financial sector. The possible transfer of certain supervisory competences from Member States to the EU reflects the SIU’s objective of more harmonised supervision of all financial markets across the EU, helping to ensure a level playing field. A subsequent proposal by the Commission in December 2025 included measures to assign direct oversight of significant market infrastructures and crypto service providers to the European Securities and Markets Authority (ESMA), the EU’s financial regulatory authority, and to strengthen ESMA’s decision-making with a new Executive Board.

Tánaiste Simon Harris has identified advancing the SIU agenda as one of Ireland’s key strategic priorities to drive European competitiveness, integration and growth during its Presidency of the Council of the EU and sees a leading role for Ireland here.