Europe’s Savings and Investments Union has a big goal
The European Union wants more household savings to support businesses, innovation, infrastructure and the green and digital transitions. Its Savings and Investments Union, launched by the European Commission in March 2025, is the policy framework designed to help make that happen.
It is important to be clear about what the Savings and Investments Union is not. It is not a new EU fund, and it is not a finished set of laws. It is a wide programme covering capital markets, banking, pension savings, retail investing, supervision, tax barriers and cross-border investment.
The scale of the challenge is large. The Commission’s March 2025 strategy referred to additional investment needs of €750 billion to €800 billion a year through 2030. A Commission webpage updated in October 2026 uses an estimate of around €1.2 trillion annually. These figures should not be treated as directly comparable, and neither is a measured financing gap. They are estimates of investment needs under different presentations.
Still, the policy problem is real. Europe has substantial household wealth, but a large share sits in deposits rather than long-term investments. Commission material has cited about €10 trillion in EU household bank deposits. ESMA found that euro-area households held around 31% of financial assets in currency and deposits in 2023, compared with 21% in the United States.
That does not mean deposits are a mistake. Cash savings provide security, liquidity and a buffer against emergencies. But it does suggest that European capital markets could have more room to grow if people who can take investment risk have practical, trusted and affordable ways to do so.
Why retail investing is central to the plan
For retail investors, the Savings and Investments Union is meant to make investing easier to understand and more accessible across the EU. The goal is not to push every saver into shares. It is to give households better options beyond low-yield deposits, while preserving consumer protection.
One major proposal is the Savings and Investment Account, or SIA. In September 2025, the Commission issued a recommendation urging member states to create or improve national SIA systems. These accounts would be designed to be simple, portable and tax-advantaged.
The recommended model would allow people to open an account without a minimum deposit or regular contribution requirement. It would offer access at least to shares, bonds and UCITS investment funds, while excluding highly risky or complex products.
For a retail investor, the basic idea is familiar. Someone could place a modest monthly amount into a diversified fund through one account, with clearer tax treatment and fewer administrative obstacles. But SIAs are not an EU-wide product with one set of rules. Tax policy and implementation remain national responsibilities. Availability, tax benefits and product choice could therefore differ significantly between member states.
That national variation matters. A useful account structure can encourage investing, but it cannot by itself solve low confidence, high fees or weak understanding of risk.
Financial literacy and trust remain practical barriers
European financial literacy is a central part of this debate. The Commission has said that only 18% of EU citizens had a high level of financial literacy in the 2023 Eurobarometer.
This is not a small issue. Investing requires people to make decisions about risk, time horizons, charges, diversification and possible losses. A tax benefit may persuade someone to open an account, but it will not automatically help them choose an appropriate investment.
ESMA’s March 2026 report on the retail investor journey reached a similarly cautious conclusion. It found no single barrier preventing wider retail-market participation. Instead, people face combinations of trust concerns, fees, poor product comparability, limited knowledge, weak incentives, behavioural habits and regulatory friction.
For example, a first-time investor may be put off by complicated disclosures, uncertain tax treatment and a fear of losing money. Another may be willing to invest but find that fund charges make small contributions feel inefficient. Improving retail investing in Europe means addressing these issues together, not treating education as a substitute for fair products and clear rules.
The EU’s Retail Investment Strategy is relevant here. The Council and Parliament reached a provisional political agreement in December 2025, but the legal text was still being finalised in early 2026. ESMA said the final text was not available when it prepared its March 2026 report. Investors and business owners should therefore avoid assuming that every proposed protection or market change is already in force.
Can EU supplementary pensions provide more long-term capital?
Pensions are another major strand of the Savings and Investments Union. Long-term retirement savings can invest patiently across public markets, private businesses, infrastructure and other productive assets. Stronger funded pension systems could therefore help deepen European capital markets over time.
In November 2025, the Commission proposed a package intended to strengthen EU supplementary pensions. It includes recommendations on automatic enrolment, pension tracking systems and pension dashboards. It also proposed changes to the IORP II directive for workplace pensions and to the Pan-European Personal Pension Product, known as PEPP.
These measures are designed to complement public pensions, not replace them. That distinction is important. Pension design remains primarily a member-state responsibility, and the Commission has said that social-partner autonomy must be respected.
Automatic enrolment could increase participation in workplace pension plans where national systems support it. Pension dashboards could help workers see retirement savings that are currently scattered across jobs, providers or countries. Better visibility may help people make more informed decisions and avoid losing track of small pension pots.
PEPP reform could also matter, especially for mobile workers and self-employed people. PEPP is a voluntary personal pension product intended to work across borders. In June 2026, the Council adopted its negotiating position on changes meant to make it more attractive. These included allowing execution-only distribution of basic PEPPs and removing the existing 1% fee cap while retaining consumer-protection measures.
However, this is not enacted law. The Council’s position is part of the legislative process, and negotiations can begin only after the European Parliament adopts its own position. The same applies to the proposed IORP II revision.
More capital is possible, but no automatic solution exists
Pension reform, better retail investing tools and stronger European financial literacy could increase the pool of long-term capital available to European companies. This may be especially helpful for smaller businesses that need broader sources of funding beyond bank loans.
But the link is not automatic. More money invested by households does not guarantee that it will finance domestic EU companies, local start-ups or priority projects. Investors may choose global funds, foreign shares, government bonds or cash-like products. That can still be sensible for diversification, but it limits claims that retail savings will directly close Europe’s investment-needs estimate.
The Savings and Investments Union should therefore be judged as a long-term enabling agenda, not a quick financing fix. Its success will depend on whether national governments implement workable savings accounts and pension measures, whether EU rules become final, and whether markets offer transparent, affordable products that people trust.
For retail investors, the practical message is simpler: keep emergency savings available, understand investment risk, compare costs and diversify. For small business owners, deeper markets may eventually widen funding options. But Europe’s capital gap will not be closed by one pension product, one account type or one policy announcement.