Starting next January, contributions and returns generated from pension plans that are at least 10 years old can be recovered without the need to justify any reason.
Each year the deadlines will be extended: in 2025 the contributions can be redeemed until 2015, while for those of 2016 we will have to wait until 2026 and so on.
For the rescue, you only have to communicate the decision to the corresponding entity, but first you have to take into account some factors, especially taxation.
The Spanish Association of Tax Advisors (Aedaf) explains that the amounts rescued are taxed as income from work and are thus integrated into the general tax base.
In case of redemption in the form of capital, Aedaf reminds, a 40% reduction can be applied to the part that corresponds to contributions made before 2007.
“If the possibility of rescuing the pension plan is being considered, it is advisable to do calculations and keep in mind that it will be more advantageous to do so in a year in which low income has been obtained, thus avoiding rate increases due to jumps in the tax scale,” adds Aedaf.
“From a tax point of view, recovering the pension plan now instead of when you retire generally means paying more taxes (…). ESalary tends to be higher than pension and, therefore, implies paying more taxes,” says the Tax Down consultancy.
The sector asks for more incentives
As of September 30, 2024, in Spain there were 7,298,183 participants in individual pension plans, a figure that has been decreasing in recent years, especially after the reduction in the deductible amount for contributions to this savings instrument.
From 2022, only 1,500 euros can be deducted in the case of individual pension plans, while in employment plans – those offered by companies to their workers – the limit for the company is 8,500 euros and the joint threshold (company and worker) remains at 10,000 euros.
The latter now have 2.7 million participants after the reform approved in 2022 to promote a retirement savings model, which, the sector highlights, still has a long way to go.
“The number of participants in occupational pension plans is gradually growingbut the contributions, the generosity of pension commitments, and the accumulated economic rights are still very modest,” Saint Lucia pointed out in a recent report.
The investment fund association Inverco has also recently stressed that the current incentives for saving through pension plans are insufficient and have asked to raise the deductible contribution limits.
According to the XV Survey on Pension Plans of the Inverco Observatory, the employers’ association of collective investment institutions, 71% of managers assure that returning to the limit of 8,000 euros per year would be “fundamental” to revitalize pension plans.
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