The market offers savers an impressive variety of financial products for clients interest in improving their pensions, the pick of which are pension plans, savings funds and life insurance. Recently guaranteed savings funds have appeared (pioneered by Banesto and Caixa de Sabadell in Spain) targeting conservative investors, in middle or pre-retirement age, who do not want to risk their money in the uncertainty of the stock markets, preferring to steer clear of both the rise and the fall of shares. These guaranteed pension plans provide minimal profits in a predetermined period. Each of the aforementioned retirement investment plans are governed by different sets of rules, covering fiscal matters, eventualities, liquidity, transfers or limits.

 

It is worth remembering that only life insurance allows clients to access the money saved before retirement, while pension plans and guaranteed savings plans require you to reach 65 years of age, exceptional cases apart. Retirement savings plans allow you to access the money invested, but not fiscal benefits of social security payments (known as PPA in Spain). Liquidity can be assured in pension plans and PPA if unemployment, absolute or permanent incapacity, serious illness or death.

 

Insurance-based savings plans are exempt from deductions or fiscal reductions, as opposed to pension plans and guaranteed savings plans. In these, the participants can deduce the general part of their income tax, with certain limits.

 

Fiscal allowances in pension plans and PPA take into account salary and will be added to the taxable total of the income tax form. If paid in terms of capital, the allowances will take into account salary if at least two years have passed since the first contribution, with a levy of 60% of the total contribution. If paid in terms of interest, the total will be integrated into the general part of the taxable total of the income tax.

 

Capital gains tax does not affect pension plans or PPA, while, in insurance plans, the value accumulated since 31 December each year will be taxed, if the individual is entitled to declare.