PIAs are a new type of investment account, designed to encourage people in Ireland to invest more of their savings. For now it’s impossible for investors in Ireland to plan for them, given the lack of any reliable numbers on limits and tax rates. The Budget, on 6 October, will resolve a lot of open questions.

So what’s a Personal Investment Account, is it any use, and when can you invest in one?

What is a Personal Investment Account (PIA)?

The proposed Personal Investment Account, or PIA, would give Irish residents a new way to invest.

The idea is that you would open an account with an investment provider and use it to invest in risk instruments such as shares, bonds, funds and exchange-traded funds.

It solves several objectives for the government: it could put the burgeoning cash pile in Irish banks to more productive use; it could assist in EU objectives for European savings and investments union, and it’s a potential middle class vote-winner.

The account is supposed to be relatively simple, with one account per person and no long-term lock-in – though as we’ll see, there are several complications already.

So there remain many questions. Here are some of them.

When will PIAs be available?

The Government has indicated that it wants the scheme to be available from 2027 – but it’s unlikely that means 1 January.

How much can you invest?

There is expected to be an annual contribution limit. We don't know what it will be, though some have suggested limits of around €25,000 – though others have suggested as little as €5,000.

How much will be tax-free?

There is supposed to be a threshold below which the annual tax won't apply. Again, no figure has been confirmed - €30,000 has been mentioned in some quarters.

What will the tax rate be?

This is arguably the biggest question.

A PIA with a generous tax-free threshold and a relatively modest tax rate could look quite different from one with a low threshold and a higher rate. Until we know these figures, it is difficult to judge how useful the account will be. The fact that you can be taxed even in years where you make low returns or losses is a significant downside – particularly for low-risk investors.

For example, if the tax rate is 1%, and your PIA earns 2% in a year, 50% of your gains are paid in tax!

How will they be taxed?

The Government is proposing an annual tax based on the value of investments held above a tax-free threshold. Some call that a wealth tax. Whether it will be more attractive to investors depends heavily on the numbers. And those numbers are precisely what we don't know yet.

How simple is it?

With a lower and an upper limit, what is effectively a wealth tax, and no facility to move your account or have more than one, it seems clear the Irish PIA will be substantially more complicated than the UK Individual Savings Account or ISA, which simply has a single annual limit and no tax.

Will Personal Investment Accounts be worth it?

PIAs will add to the options available to Irish investors. But there is a growing sense they have been over-hyped. This is no SSIA. But if used in the right way, PIAs will likely become one more pillar supporting most Irish investors’ wealth.