Brokers Ireland urges sustainable funds scheme to encourage investors away from low-yield cash accounts

Financial products

Under the scheme, investments made exclusively into sustainable funds would attract a reduced rate of exit tax at 25pc, as opposed to 40pc. Photo: Stock/Getty

Fearghal O'Connor

Industry group Brokers Ireland (BI) has proposed a new scheme to encourage personal investors to take savings out of low-yielding cash accounts and put them into sustainable investment .

Under the scheme, outlined in a pre-budget submission – investments made exclusively into sustainable funds – in particular those consistent with cutting CO2 emissions – would attract a reduced rate of exit tax at 25pc, as opposed to 40pc.

To participate, life assurance companies would have to offer a separate category of ESG (environmental, social and corporate governance) bond policies, said BI. It estimated the fiscal cost as modest or close to neutral.

“That would be a win-win for the Government and consumers who currently hold a very high level of savings in very low-yielding cash accounts,” said Rachel McGovern of BI.