The Irish government has announced its Budget 2024, which includes plans to create a Future Ireland Fund that will support state costs in the future such as pensions.

Delivering the Budget 2024 yesterday, 10 October, Minister for Finance, Michael McGrath, said the “prospect of headline budgetary surpluses in the coming years affords us an opportunity to prepare now for the challenges we know are on the horizon”.

Therefore, he announced the Future Ireland Fund would be created, using some of the windfall corporate tax receipts, which will benefit everyone in Ireland, including future generations.

“It will help us to meet the costs of running the state in the future, and will make a contribution to the cost of healthcare, pensions, home care and much more. For example, we know we are facing considerable costs in relation to an ageing population, age-related spending will be around €7-8bn higher by the end of this decade than it was at the start of the decade – this is simply the ‘stand-still’ cost.”

McGrath said the government will invest 0.8 per cent of GDP annually into the Future Ireland Fund from 2024 to 2035, equating to €4.3bn in 2024. In addition, he said the government will transfer seed funding of just over €4bn into the fund next year from the dissolution of the current National Reserve Fund.

It is expected that with a funding level of 0.8 per cent of GDP annually, the fund could potentially reach a total of €100bn by 2035.

“It is intended to preserve the fund over a longer period and that the investment return would be used to support government expenditure. It will be a matter for the government of the day when the drawdown occurs to use the return from the fund appropriately.

“There are of course risks that could crystallise over the contribution period such as a national or global economic shock or reduced corporate tax receipts, but as we stand here today, this is a realistic and achievable plan for Ireland.”
Furthermore, Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe, announced plans to address long-term sustainability challenges faced by the pension system.

“Earlier this year the government decided against increasing the pension age but instead to take a measured approach to increasing pay-related social insurance (PRSI) contribution rates on a phased, incremental, basis over a number of years,” he said.

“It is therefore appropriate that we act now to increase PRSI contribution rates; so from 1 October next year all PRSI contribution rates will increase by 0.1 per cent. This measure, which will raise €240m in a full year, is a modest but necessary step to secure pension entitlements for this and for future generations.”

Share Story: