In late September the European Commission (EC) introduced a new European blueprint for Savings and Investments Accounts (SIAs) or products for retail investors based on existing national best practices, including recommendations to EU Member States on the tax treatment for such investment accounts.
The EC is strongly recommending that all EU countries introduce simple, reliable and easily accessible Savings and Investment Accounts offering broad investment opportunities and tax incentives.
The notion that every EU citizen could have a tax-incentivized investment account in future is one the financial services industry is excited about.
Bridging the EU investment gap
Their creation stems from the EC’s overarching Savings and Investment Union (SIU) strategy, which is designed to boost EU citizens’ wealth while bolstering economic growth and competitiveness across the Union.
The Savings and Investment Union’s genesis lay in the stark realization that the EU itself faces a serious investment dilemma. With its investment needs estimated at an additional €750-800 billion1 annually by 2030, European governments face a growing fiscal squeeze.
The economic competitiveness gap between the EU, US, and China as outlined in the Draghi and Letta reports2 places the EU at an inflection point. In the absence of material policy change, the block could remain in a phase of anemic growth, and it could drift further behind more dynamic economies.
Global policymakers, particularly politicians, have long looked at new ways to attract private capital and investment into their real economy. Now, both growing private market capital pools and retail investors are firmly in their sights – but increasing retail investor participation is easier said than done.
Since the Savings and Investment Union’s inception, investor protection has been the main focus for European policymakers. Now, attention has shifted towards investor participation and growth while the question remains – can they really achieve it?
This is a significant EU policy shift, quite unlike any we have seen before. While Savings and Investment Accounts blueprint recommendations have now been published and the project holds considerable opportunities for asset managers – there also exist a number of challenges that must be overcome to ensure success.
These range from increased engagement on financial literacy to ability to grant tax incentives in a world where fiscal space is challenging with so many competing priorities for most governments.
Emulating the US
From a tax perspective, the US offers a variety of investment retirement accounts (IRAs), such as 401k and Roth IRAs each with their own set of tax benefits, limitations, and access rules.
Unlike America, where workers are generally very familiar with such tax efficient investment wrappers, tax incentivized investment accounts are less common in Europe.
There are several notable exceptions like the UK ISA, which is also undergoing reform and the Swedish ISK account which is often held up as the poster child to emulate within EU circles.
The ISK has a unique combination of flexible features. Among these, it has no annual or lifetime deposit limits, no minimum holding period, virtually no restrictions on what savers can invest in and a clear and simple tax incentive.
Norway and France also have discrete accounts which have been successful, but the central point is that the vast majority of EU member states do not have such accessible accounts nor an established retail investment culture.
While the EU has many diligent savers - and more than €11 trillion in household savings largely parked in low-yield, liquid assets3 - it has, to date, had no Eurozone-wide ISA or 401K plan equivalent. While there is nothing wrong with cash deposits at a time of ongoing inflation, citizens require greater optionality.
The proposed Savings and Investment Accounts could fulfil this role, attracting investors to a user-friendly tax efficient investment structure, akin, yet different to the US 401K plan. The broad wrapper will likely have a pan European reach while taking account of individual country nuances such as regulations and taxation.
Deregulation and education
For this to happen the EU market needs to see recalibrated investment regulations, simplification and, crucially, education. A September announcement that the EC was also launching a new Financial Literacy Strategy which aims to help citizens make sound financial decisions was both timely and welcomed by industry participants.
From an educational standpoint, financial education levels and financial literacy must improve across Europe to help potential investors fully understand the practical benefits of investing over the longer term (See below).
Investing isn’t actually rocket-science even if at times industry likes to make it seem so! Having a clear and reasonable financial goal, understanding the benefits of diversification, a reasonable cost of investing and maintaining long-term discipline should be intuitive to most, but in reality, are not.
While Europeans tend to be good savers many simply do not have the knowledge to invest with confidence at a retail level - particularly via exposure to more complex investments. This must surely change over time if the European investment market is to grow.
European politicians also increasingly appear to understand that the mobilization of capital can be good for their economies and for their citizens’ long-term benefit.
Joining the dots
For now, while the EU finalizes its wider Savings and Investment Union agenda and we have the Savings and Investment Accounts blueprint recommendations – the ball is now in the member countries court to take action.
The willingness of member state governments to incentivize change will be interesting to watch, since what’s good for the wider EU may not always be good for a country’s own tax take or national bank champion, for example.
However, that cynical view of the project doesn’t negate the central fact that the EU requires increased amounts and diversification of funding sources for its real economy. If it is to invest the required amounts in its defense, sustainable, and digital transitions and shrink its ever-increasing pension funding gaps then finding new sources of funding will be imperative. The question is: when will Europe truly embrace a culture of investing?
If successful, the Savings and Investment Accounts proposals could at least serve as a unifying catalyst for concrete policy actions with a chance of creating a virtuous circle which benefits asset managers, banks, the real economy, regulators, politicians, and most importantly EU citizens.
In the frame: BBH joins the European investment debate
A recent Dublin panel discussion, hosted by the Institute of International and European Affairs and featuring BBH partner and global head of investor services Seán Páircéir, highlighted the urgent need to create a genuine investment culture both in Ireland and across the EU.
The panel also included European Commission director general John Berrigan, Susan O’Reilly, head of funds, markets, and securities at the Irish Department of Finance; and Jonathan Cleborne, head of Europe at investment manager Vanguard.
Delegates heard Cleborne underline the need for improved financial literacy but also praise moves to boost Irish investment through measures such as the establishment of a new auto-enrolment pensions scheme. Auto-enrolment officially starts in Ireland in January next year and is designed to be a practical no fuss means of boosting retirement investment in Ireland.
In the wider debate panellists also concluded that:
- Growing the EU capital market is a strategic necessity, not a luxury.
- Creating Savings and Investment Accounts across 27 EU states is vital yet complex. Retail participation depends on easy access, simple choices, and appropriate options, not just financial literacy.
- The Savings and Investment Union should leverage UCITS, a trusted global fund brand, to drive retail participation.
From an Irish standpoint, research findings from Vanguard suggest that if domestic savers shifted even 10 per cent of their cash - Irish households have more than €165 bn sitting in low-yielding bank accounts - it could unlock €23 bn* worth of excess savings.
A new Irish Department of Finance roadmap for retail investment is to be published in early 2026 which aims to simplify and adapt the tax framework for Irish retail investors.
* Business Post. Behind the curve: Top EU official’s stark warning over capital markets union. 26 November 2025.
1 FT. Mario Draghi calls for €800bn EU investment boost. 09 September 2024.
2 The Draghi and Letta reports, written by former Italian Prime Ministers Mario Draghi and Enrico Letta outline critical strategies for enhancing the EU's economic resilience and competitiveness. They argue there is an urgent need for investment and reform in the single market.
3 CFA Institute. Unlocking Retail Capital: EU Reform Agenda Comes into Focus at CFA Institute Event. 12 June 2025.
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