Wednesday, December 8

Pension plans and the maturity of the Spanish saver

The new restriction on savings planning for Spaniards, which has meant the reduction of the maximum contribution limit to individual pension plans, from 8,000 euros to 2,000 euros already this year, together with the proposal for a further reduction to 1,500 euros for next year, it is very bad news for saversThus, their long-term investment options are drastically reduced.

On the other hand, the Government wants to promote publicly promoted employment pension funds, to which it will displace the tax incentives for individual pension plans.

We absolutely share the Government’s idea of ​​stimulating business plans, since their development is very far from that of the world’s main economies, but such development should never be ‘at the cost’ of reducing the brilliant expansion that individual plans have had. And of course, the time is not right to reduce incentives to save in the long term when Spain urgently needs it.

Savings mark maximum

The proof of the Spanish commitment to individual pension plans is that accumulated savings continue to reach highs every year, despite being an instrument with scarce tax incentives compared to developed countries, as recognized by the OECD.

A look at the year 2020 allows us to see the maturity that the Spanish saver has acquired during the pandemic, demonstrating its planning capacity with a view to the future, your commitment to medium and long-term savings products and your willingness to exercise financial control in times of uncertainty.

The notable preference for this product is complemented by its advantages in preparing for retirement.

Along with its flexibility, it is worth highlighting the security, supervision, transparency and professional management, favorable taxation even though the tax deductible amount has been reduced and, of course, the possibility it offers to control and diversify risks, a key aspect to the time to create a solid portfolio ready to face different economic situations.

Inverco Observatory Study

Both aspects – the maturity of the participant and the relevance of pension plans in the current environment – are reflected in the latest study published by the Inverco Observatory on saving in pension plans by autonomous communities and provinces.

This study collects 2.7 percent growth in accumulated savings in individual plans during 2020, which translated into a historical maximum of 82,014 million euros, figures driven by the revaluations experienced by the pension fund portfolios, as a result of the returns obtained by the management companies in favor of savers during the last months of that year .

A reference instrument for finalist savings

There is no doubt that pension plans continue to be a reference instrument for all participants who want to channel their long-term savings, especially given the high uncertainty regarding the sustainability of public pensions and the accumulation of savings due to consumption restrictions in the harshest months of the pandemic.

However, it cannot be overlooked that this instrument still faces significant challenges.

One must be to incentivize its use and, consequently, rethink the contribution limit upwards, so that you can continue to complement retirement and contribute to the consolidation and maintenance of savings in Spain.

And a second, what happens through a bet of the Government for the development of company pension plans of public promotion, which should transform the situation of the pension system to bring it into line with the OECD average: more capitalization and accumulation of savings.

It is essential that, when the bill is published, it includes strong fiscal incentives for companies to promote the creation of pension plans for their workers. There is no time to waste and the effort is well worth it.

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