The Portuguese’s nest egg of retirement savings plans (PPR), in the form of insurance, which are the most commonly used because they have guaranteed capital and are lower risk, have fallen sequentially since 2019, the year before the pandemic. Accumulated savings in these types of products shrunk by 18.5% last year to €14.72 billion, compared to €18.07 billion four years ago, according to Dinheiro Vivo accounts based on preliminary data from the Portuguese Association of Insurers (APS).
It means that there are 3.33 billion euros less in PPR savings in the form of insurance than in 2019. The number of savers also fell by 4.8% to 1.72 million, while four years ago in Portugal there were a total of 1, 81 million PPR insurers were active. subscribers, according to APS statistics.
In the same vein, the amounts of annual contributions have fallen sharply: they fell by more than half (51.6%) to EUR 1,515 million, compared to the EUR 3,131 million paid to insurers in 2019.
The data sent by APS to Dinheiro Vivo does not explain the reason for the reduction in Portuguese savings for retirement. However, a survey by Deco Proteste, published on February 28, shows that 61% of Portuguese workers, aged between 25 and 65, do not save and that the main reason for this is the lack of money.
Lose renovation
The scenario is especially alarming when it is known that each pensioner currently loses about 471 euros per month or 6594 euros per year compared to the value of the last salary, according to the same barometer of Deco Proteste. A study published last year by the Nova School of Business and Economics on behalf of the Insurance and Pension Funds Supervisory Authority (ASF) shows that those who retire in 2070 in 47 years’ time run the risk of taking a pension that will be worth less. are more than half of his pension. your last salary. For example, if an employee with a salary of EUR 2,000 retires in 2070, he will only be entitled to 46% of his last salary, ie EUR 920.
Even without taking into account these more catastrophic projections, only the measure of the government with an absolute majority of the PS to halve the regular annual update of pensions in 2023 to values between 4.83% and 3.89%, a permanent reduction of pensions from 2024.
At a time of high inflation, which reached 8.2% in February, and the resulting loss of purchasing power, it is becoming increasingly difficult to make it to the end of the month with an extra amount to invest in PPR. And even those who subscribed to PPR now have incentives to redeem them, thanks to measures approved by the government to mitigate the impact of the continued price hike.
Pay off without penalty
Last year, the executive passed Law No. 19/2022 of October 21, which allowed the early withdrawal of PPR for any purpose, without penalties, “up to the monthly limit of the Social Support Index, which is 480.43 euros , before five years have elapsed after subscription, and provided that the reimbursement relates to amounts subscribed until September 30, 2022,” an official source from the Ministry of Finance clarifies in response to questions from Dinheiro Vivo.
That is, these taxpayers, even if they increase the PPR, as long as the rules of the law are respected, do not lose the tax credit of up to 400 euros with the IRS.
In the National Budget for 2023, this measure was strengthened, with the budget law stipulating that “partial or full repayment of the value of savings plans is permitted during 2023 [PPR, PPE e PPR/E] for the payment of installment payments under mortgage credit agreements on real estate intended for own and permanent residence of the participant, as well as credit installments for the construction or improvement of real estate for own and permanent housing, and deliveries to housing cooperatives in own housing solutions permanent , exempt from the obligation to remain at least five years for mobilization without penalty” provided for in the Statute of Tax Benefits (EBF).
The EBF grants an IRS benefit equal to 20% of the assets invested in the PPR up to a limit of 400 euros per taxpayer (if he is up to 35 years old), 350 euros (between 35 and 50 years old) and 300 euros (over 50 years old).
For example, savers “requesting the partial or full repayment of the PPR in 2023 for the payment of staggered credit contracts for own and permanent housing can do so, without any limitation as to the amount or the time period already elapsed since the subscription, nor is it punished,” explains the guardianship led by Fernando Medina.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
