Coyfer, insurance brokers

Savings, pensions and PIAS

Reaching tomorrow with more than just the state pension.

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Individual plan
€1,500 a year
PIAS returns taken as a lifetime annuity
Tax-exempt
Review
Annual

Summary

We do not sell fashionable financial products: we put what is available on the table, with its tax advantages and its small print. A pension plan gives you tax relief today but is taxed when you draw it; a PIAS offers no tax relief, but its returns are tax-exempt if taken as a lifetime annuity. The decision depends on your marginal tax rate and on when you will need the money.

What we put on the table

  • Individual and workplace pension plans
  • PIAS (Spanish individual systematic savings plan), tax-exempt when taken as a lifetime annuity
  • Savings insurance with guaranteed capital5
  • Unit-linked plans4 for longer-term investors
  • Drawdown planning2 and its tax treatment
  • Annual contribution review

Three products, three tax approaches.

Pension plan

Benefit nowReduces taxable income
On payoutTaxed as employment income
Contribution limit€1,500 a year, higher with workplace pension plans
LiquidityOnly in specified cases
Who it is forMarginal tax rate1 currently high

PIAS

Benefit nowNone on contributions
On payoutReturns tax-exempt if taken as a lifetime annuity3
Contribution limit€8,000 a year and €240,000 in total
LiquidityAvailable, but the tax advantage is lost
Who it is forLong horizon and income payout

Savings insurance

Benefit nowNone on contributions
On payoutOnly the return is taxed
Contribution limitNo limit
LiquidityDepends on the product
Who it is forMedium-term goals

General summary for information only. The exact tax treatment depends on your circumstances; we will calculate it for you before you decide.

How much you could build up by saving every month

A simple simulation of regular contributions. A PIAS allows up to €8,000 a year and €240,000 in total per person.

€
years
%

Estimated fund value

-
Total contributed
-
Assumed return
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Assumed return, not guaranteed. Products with guaranteed capital offer lower rates. Figures before tax.

The figures that set the limits.

1.500 €

Individual pension plan

Maximum annual contribution deductible from taxable income.

8.000 €

PIAS per year

Annual premium limit per person.

240.000 €

PIAS in total

Lifetime cumulative limit per person.

5 years

PIAS holding period

Minimum period from the first premium to keep the exemption.

Notes

Key terms worth knowing.

  1. Marginal tax rate. The percentage of income tax (IRPF) you pay on the last euro you earn. It determines how much a pension plan saves you.

  2. Drawdown. Payout of the accumulated savings. It can be taken as a lump sum, as an income or as a combination of both.

  3. Lifetime annuity. Regular payments for as long as you live. This is the route that unlocks the PIAS tax exemption.

  4. Unit-linked. Savings insurance linked to investment funds. Greater potential, with no guaranteed capital.

  5. Guaranteed capital. The insurer guarantees the amount at maturity, in exchange for a lower return.

Questions

Pension plan or PIAS?

A pension plan reduces your taxable income today and is taxed when you draw it; a PIAS offers no tax relief on contributions, but if you take it as a lifetime annuity after five years, the returns are tax-exempt. It depends on your tax situation.

How much can I pay into a pension plan?

The individual limit is €1,500 a year, which can be increased with employer contributions. That is why workplace pension plans have become so important.

Is the capital guaranteed?

With guaranteed-capital savings insurance, yes; with unit-linked products, no. We will explain it clearly before you sign anything.

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