Why long-term saving?
- Your state pension might not be enough to maintain your current standard of living when you retire. With long-term saving, you can build up a supplementary pension.
- Long-term saving could potentially provide a tidy tax benefit. Even if you're already saving for your pension, you can combine this with long-term saving.
- Spouses can each combine pension saving and long-term saving, if they meet the conditions to benefit from this
When should you start?
Even while you're paying off your home loan, you can get tax relief under the long-term saving scheme, depending on when your home loan started. The possibility of combining both tax schemes depends on your tax residence on 1 January.
Did you take out a home loan from 2016 for your own home? Then a full combination of long-term savings and the Flemish Housing Bonus is allowed.
From 2020, the Flemish housing bonus is abolished and it is also possible, during your home loan, to enjoy the tax benefit of long-term savings.
In Wallonia, the combination of both tax systems (chèque habitat and long-term savings) is possible for your sole and own home starting in 2016.
Since 2017, you have been able to combine long-term saving with your home loan in Brussels because that type of loan no longer qualifies for tax relief.
Did you know that you can also start long-term saving before you turn 65 and that you also continue paying tax after you retire? This gives you the opportunity to enjoy a tidy bit of tax relief in the years to come.
What forms of long-term saving are there?
You can save for the long term through a savings-linked insurance or investment-type insurance product.
- A savings-linked insurance product pays a guaranteed fixed rate of interest on the amounts paid in, plus a potential annual profit share, though that is not guaranteed.
- With an investment-type insurance product, the capital and income are not guaranteed. One or more investment funds in the contract determine your return.
How much does long-term saving cost?
You pay entry charges for all payments made into a life insurance scheme. A statutory insurance premium tax is also payable on the gross premiums paid.
In an investment-type insurance product, you pay management fees at the level of the investment fund and these are usually deducted from the net asset value of the fund. With investment-type insurance products, you pay no exit charges.
If you want to withdraw your savings from a savings-linked insurance product before the end date of the contract, you will have to pay exit charges. You don't pay any exit charges when you take statutory retirement or early retirement if the contract has been running for at least 10 years.
With long-term saving, you pay 10% final tax when you turn 60 or after 10 years if you took out the contract aged 55 or older.