I wonder if we’ll see some kind of decision on this matter during this parliamentary term. The National Coalition Party could strengthen their support if they manage to push this through somehow. Now that investing has also become a hobby for the common folk, even the Centre Party might be amenable to this decision
The PS account (private savings account) was a pretty good invention, but the terms were tightened for young people (i.e., new openers), so the PS account is no longer very appealing. However, I have been thinking a little about opening a PS account and taking advantage of the tax benefit.
I really hope that (at least in this matter) we follow the example of our western neighbour. It would lower the threshold for saving, and an investment savings account would eliminate a lot of hassle/trickery. However, it seems that this issue will not go straight to goal (despite its excellence)..
In my opinion, this turned out quite well in the end, at least at first glance. I’ll have to examine it more closely when I have more time. Following the investment-social media bubble, the €50k upper limit seems to be quite a shock, but I personally see this entire account as a good incentive for low- and middle-income earners to gradually start owning something other than their apartment and the clothes on their back.
Having grown up in a middle-income family, it’s hard to imagine that my parents would have, back in the day, saved a total of €100k “in a flash” after all mandatory living expenses and mortgage payments, as one might imagine from the comments. €50,000 is actually a lot of money for someone who has to pay for their own and their children’s lives with a net income of a little over two thousand. In normal family life, there are more important things to take care of than stock investing.
It would be nice if one never had to pay taxes, got free coffee from cafes, etc., but since the goal here was apparently above all to facilitate the position of small investors and encourage them to start saving, the loudest protesting traders with millionaire portfolios are not the top priority. They don’t need any encouragement to invest, especially to start.
If all Finns had €50k in stock assets by retirement age, we would be doing quite well as a nation.
According to Sari Lounasmeri, CEO of the Finnish Foundation for Share Promotion (Pörssisäätiö), the €50k limit applies to the invested capital, meaning it can grow freely beyond that.
This investment savings account seems quite interesting, but we should wait for the government’s proposal to be finalized and for its parliamentary debate. I see considerable regulatory risks in this setup, as it is quite probable, looking at the support figures of different parties, that the next government will not necessarily be very investor-friendly. In that sense, it is good that the regulation concerning the investment savings account would come into effect only in 2020 or later, so that we can see how the next government might change the legislation concerning this investment savings account. The worst-case scenario is likely that regulation will weaken the tax treatment or some other feature of the account, such that the entire account loses its meaning, and in an even worse scenario, the money put into the account gets “stuck” in the account, for example, for tax reasons. I don’t want to be a doomsayer, but having followed politics for too long, I could imagine that this account will become a target for left-wing parties. But that remains to be seen.
I read somewhere that the average Finn only has 4k euros in savings. Based on that, 50k is definitely enough. However, the intention is to help people’s capitalism and bring in new small investors, not to help the rich fall even more in love this is a great thing
This new investment savings account is a great thing. Finally, reforms are being made that benefit young people the most. The 50k limit can easily be raised in the future. The state doesn’t lose any tax revenue in the long run, but problems arise if tax revenues suddenly plummet. This limit helps mitigate one-time effects, and it can be safely raised in the future, as long as the state budget remains balanced.
Of course, the whole thing could have been sorted out at once, but knowing the Finnish political system, no proper comprehensive reforms are achieved, so this is a pretty good start.
@Kalle_P the median portfolio of Finnish stock savers, or the most typical portfolio to put it clearly but not precisely, is about 4,000 euros. The average is over 40,000 euros, which illustrates how concentrated the wealth of Finns in stocks is among a few.
This account is a great thing all in all and I agree with @g3235286: young people benefit the most. =)
Are many people using a PS account here? Despite everything, I’ve considered opening one to take advantage of the tax benefit. You can put 5000 euros in there annually. Since you can withdraw it in life’s crisis situations, I probably wouldn’t need to use those savings otherwise. You can very well let those investments sit there indefinitely.
Who is this Aston1 anyway?? The same as Aston original on these forums? Uncle is a bit confused, please help. If they are two different people, could the copy change their username to something else?
My personal goal is to get my portfolio to a 6-figure sum some day, even though I’m just an ordinary 23-year-old working joe, with only a vocational school background. I don’t know what I’ll use that money for, but I know for sure that I’ll have ideas in 20-40+ years
My view is that the National Coalition Party (Kokoomus) is specifically playing this issue so that they can get the votes of potential investors in the elections: they raise the issue, but leave it unconfirmed during this government’s term, which makes it partially conditional on Kokoomus’s success. I find it a regrettable self-serving game, meaning the issue isn’t seen through to the end as it could have been, but is instead used as bait for the election campaign.
Personally, I would have hoped for a bigger overhaul, where all investors would have been put on the same footing at once, regarding both dividends and losses/gains. Funds, insurance wrappers, institutions, large owners, and small investors – the same rules for everyone in terms of taxation. In this scenario, a much smaller and fairer tax burden could have collected at least the same amount into the state coffers, and we would get rid of the multi-layered system and the “small investor pays” policy (because we don’t have lobbyists or advocates, not even Kokoomus promotes the interests of small investors, but rather those of bigger players).
I believe that the simplest possible taxation would encourage many to invest. Now, one has to investigate and be aware, which for many is already the “not interested”-level threshold.
Has there been any discussion yet about using an investment savings account as collateral for a loan?
I once looked into this with a securities account when buying an apartment. The process was cumbersome, and the offered agreement was so poor, in my opinion, that I ended up liquidating part of my portfolio to cover the collateral difference.
Mainly, I’m interested in whether an investment savings account would eliminate restrictions on trades. It would be logical to only apply them to withdrawals from the account.
It’s advisable to wait before using an equity savings account, as the Central Organization of Finnish Trade Unions (SAK) has apparently proposed in government negotiations that the tax support for equity savings accounts might need to be reconsidered. I believe I warned that the incoming government might not be very investor-friendly, and after reading the Kauppalehti article, I can’t change my view.
this is a great thing 