MONEY has been flowing into special savings incentive accounts (SSIAs) at a rate of €187m a month this year compared with €182m a month in 2003 as savers bump up their contributions to get the maximum benefit from the government’s 25% contribution.

A new analysis of the scheme from the Revenue Commissioners shows the percentage of people on lower incomes squirrelling away money has increased compared with those on middle and higher incomes.

Under the scheme introduced in 2001 by Charlie McCreevy, the former finance minister, some €2.187 billion was saved last year. In the first eight months of 2004 the amount paid into the scheme had already reached €1.497 billion.

A total of €5.9 billion was paid into the scheme between May 2001 and the end of August 2004. This is being topped up to the tune of 25% by the government and holders of deposit-based schemes have also benefited from additional interest payments.

Between May 2001 and September this year, the free money giveaway resulted in €1.444 billion in tax credit payments being made.

Though 50,000 people have bailed out of the government’s “free money” saving scheme, more than 1.1m people are contributing on a monthly basis.

Experts are forecasting a spending boom when the first SSIAs start maturing in May 2006, with billions of euros being released into the economy throughout the following 12 months.

Goodbody Stockbrokers predicted the total payout for savers will be €14 billion in the run-up to the expected date of the next election in mid-2007.

With an average payout of €13,000 per saver, the huge cash injection is expected to result in a consumer splurge on house buying, home improvements, holidays and cars.

Two out of five account holders are now saving the maximum permitted amount and they will end up with a nest egg of about €21,500. The Revenue analysis shows the average SSIA holder is aged 41 and the average monthly amount being saved last December was €165.

The 30-39 age group accounts for 24.9% of accounts with 22.5% aged 40 to 49 and 19.9% between 20 and 29.

The scheme failed to attract the elderly with only 15% of those over 60 taking part.

When the scheme started in 2001, 33% of account holders earned less than €20,000 a year but that percentage rose to 37.5% by the end of last year.

The percentage of savers in the €20,000-€50,000 wage bracket dropped from 47.7% to 45.3% in the same period while those on incomes of more than €50,000 has dropped from 19.2% to 17.1%.

Those who stay in for the full five-year period will only be taxed at 23% on the interest or investment income earned on the money.