There is a good chance that your state pension may not be enough to maintain your lifestyle once you retire. Starting up a pension savings scheme is an excellent way to build up a supplement on top of your state pension.
From 10 euros a month
You can save for your pension from as little as 10 euros a month.
30% annual tax relief
The maximum amount qualifying for tax relief in 2017 is 940 euros.
Several set-ups possible
Are you hoping for long-term growth or do you want the security of a fixed-interest return on each deposit? At KBC, you choose the formula that suits you best.
Why you should start saving for your pension
Look to the future: supplement your state pension
Fact: over 450 000 of our clients save for their pension with us.
In the short term: annual tax relief of 30%
The maximum amount that can qualify for tax relief in 2017 is 940 euros. The maximum tax break is therefore 282 euros of what you earn in 2017 (not including the additional impact on local income tax liability). Because this is a tax break, it's naturally only attractive if you pay personal income tax.
The return you could get on your pension savings
Example: say that you start saving for your pension at the age of 25 and deposit 940 euros a year. After 40 years, you'll have built up a total of 37 600 euros. However, at an interest rate of say 1.5% and after a one-off deduction of tax at the age of 60, your actual pension capital could be as high as 44 611.55 euros. All told, therefore, your pension savings will have generated a gain of 18 291.55 euros.1
Your return depends on the set-up you go for.
Pension savings fund
A pension savings fund invests in stocks and bonds and is therefore susceptible to fluctuations on the financial markets. As a result, in the long term, chances are you will achieve a higher return but you nonetheless run a certain risk since the amount of your return and repayment of the capital you invest are exposed to market risk and cannot therefore be guaranteed.
Pension savings insurance
If you seek a higher degree of security, you're better to go for a pension savings insurance scheme. Each deposit you make earns guaranteed interest, right up until the final date of your contract. In addition, depending on the insurer's results, you may also be paid a profit share, but in this case that is not guaranteed.
The costs when saving for your pension
Every time you pay into your plan, you pay entry charges. If you opt for a pension savings fund, you also pay annual management fees, because the fund invests in stocks and bonds, which need to be actively monitored.
That said, there is a very favourable final tax charge, on top of the attractive tax relief and (potentially) high returns. The tax is generally payable on your 60th birthday. If you start with a tax-advantageous savings scheme after turning 55, the tax charge is due after ten years.
Note, however, that tax treatment will depend on your individual circumstances and can change in the future. For further details (including on the final tax charge), please see your local KBC branch or agency.
1 This simulation is for illustrative purposes only and provides no guarantee whatsoever of future returns. The maximum tax-deductible amount for pension saving schemes in 2016 is 940 euros.
Return on pension savings
Is it better to opt for a pension savings fund or pension savings insurance plan?
Getting started with pension savings
As soon as you start work and are 18 or over, you can start saving for your pension. And that's a very good idea, too, because starting early has lots of benefits.
Pension savings fund
A pension savings fund invests in shares and bonds. You can expect to achieve a higher return in the long term, but there is some risk involved.