EU Savings Wrapper Gets ‘Lukewarm’ Response From Member States
April 16, 2025
Plans by Brussels to encourage the development of tax-free savings accounts for retail investors are getting a “lukewarm” response from national capitals, according to experts.
The European Commission last month issued an action plan to develop the savings and investment union project, which aims to encourage EU households to invest more of their money in capital markets.
The commission said it would present a “blueprint” later this year for the development of an investment savings account for consumers, including recommendations to EU member states on how to grant tax advantages to retail investors.
But panelists on an Ignites Europe webcast said the commission’s plans for a tax-incentivised savings wrapper were not generating enthusiasm among ministers and regulators in many EU countries.
Michael Pedroni, chief executive of Highland Global Advisors, a regulatory consultancy, said many national authorities had had a “lukewarm response” to the commission’s plans.
He said: “Some of them are in favour of creating a best practices blueprint that EU member states could then take into account.
“But most of them were pretty cautious and tepid about any area where the commission starts to get involved in taxation.”
Pedroni added that the commission was now fighting “a rearguard battle against some member states” who would prefer to develop a new kind of EU-focused investment fund rather than a savings wrapper…
Pedroni added that while investment accounts did not enable savers to avoid tax, the tax was “deferred to the future to when [investors] actually start withdrawing from the account”.
“Governments are always inclined to want tax revenue now as opposed to punting it into the future,” he said.