“Department of Finance developing new plan for excess corporation tax receipts as pressure builds for long-term savings solution”

As the population continues to age, the pension crisis in the UK is becoming increasingly severe, with many people facing the prospect of a bleak retirement. However, there may be some hope on the horizon with the introduction of a new savings vehicle that uses corporate tax to defuse the pensions time bomb. This innovative approach aims to provide a sustainable and feasible solution to address the crisis and help individuals secure their financial future. In this article, we’ll explore this new savings vehicle in more detail and examine its potential impact on the pension landscape in the UK.


The Department of Finance is currently developing a new plan for excess corporation tax receipts, which will be presented to Cabinet in the upcoming weeks. The plan was initially intended to transfer a set amount each year to a rainy-day fund, but this approach was criticized as being insufficiently strategic. Two factors prompted the need for a more active approach: first, the decision not to raise the state pension age, which will increase financial pressure in the coming years; and second, a surge in tax receipts, which has led to the creation of a new savings vehicle or state investment fund. The fund will be “actively managed” and will be used to meet age-related financial pressures. Whether it will replace or complement the existing National Reserve Fund, which already contains €6 billion, is uncertain. The Irish Fiscal Advisory Council has proposed the creation of a separate state pension fund, which would require long-term financing and the implementation of international best practices. One proposal is to raise social insurance rates to balance the fund over the long run.


In conclusion, the introduction of this new savings vehicle is a promising solution to address the looming pensions crisis that threatens the financial security of countless retirees. By leveraging corporate tax incentives, this innovative approach incentivizes employers to take a proactive stance in ensuring the long-term stability and sustainability of employee pension plans. It is encouraging to see the government and private sectors collaborating to develop meaningful solutions for the challenges of an aging population. We hope that this new savings vehicle will gain widespread adoption and provide a viable solution for managing the pensions time bomb.