Mixed appeal seen in new Swedish savings account
There are mixed views as to whether the 80,000 investment savings accounts opened in Sweden since the start of the year represent a success or failure of one of the flagships of the government’s savings policy.
According to local daily Svenska Dagbladet, the four biggest banks in the country administer 60,000 of the accounts – investeringssparkonto – which are intended to encourage savings in equities and funds by offering tax advantages.
The key benefit is that investors are not taxed on gains each time they sell assets. Instead, they are subject to a single tax based on the average value of assets in the account as measured on four occasions through the year, and on the level of payments into the account through the year.
Financial markets minister Peter Norman, who pushed hard to implement the legislation establishing the account, is reported by Svenska Dagbladet as being pleased at the level of takeup, especially among the four big banks.
However, the paper calculates that the takeup represents just half a percent of these banks’ total customer base. “At Swedbank just 0.4% of the bank’s 4.1 million retail customers have opened an investment savings account.”
Swedbank counters that the number of customers this type of account would actually suit is just 3.1 million, which means the takeup level is higher at 0.6%.
Svenska Dagbladet also points to market research done by Sifo on behalf of Avanza, one of Sweden’s larger online banks. It said that 79% of those surveyed did not even know that the account existed. Avanza suggested that further pressure would be required by the government on the banking industry to ensure a higher takeup of the account, as it is a type of savings product that does not necessarily boost earnings of those institutions that offer it.