PENSION SAVINGS SCHEME

• PPR in the form of insurance – generally offering a guaranteed minimum capital or income (more conservative).

• PPR in the form of an investment fund (PPR/OICVM or pension fund) – invests in financial markets and does not offer capital protection, but it may provide a higher long-term return.

• PPR in the form of insurance is a more conservative insurance product that can offer a capital guarantee or minimum return.

• PPR in the form of a fund is an investment product managed as a fund. It is not guaranteed to make a profit and its value depends on the performance of the financial markets.

PPR funds invest in a diverse range of assets, such as bonds and shares, according to the fund’s risk profile. PPR insurance can invest in more conservative assets, according to the product’s investment policy.

Yes. The value of PPRs without a capital guarantee can fluctuate due to market volatility. Those with a guarantee tend to be less risky, but may offer lower returns.

When choosing a PPR, the following must be taken into account:

• The investor’s risk profile;
• The time horizon for savings;
• The product’s costs and commissions;
• Financial objectives (supplementary pension, liquidity, etc.).

Although there is no ‘ideal’ age, the earlier you start investing, the more time your money has to grow, and the greater your potential for appreciation. You will also be able to benefit from the maximum annual IRS deduction limits.

Investing in a PPR allows you to benefit from IRS tax advantages, including the possibility of deducting in IRS some of your contributions. You can also enjoy reduced taxation on gains upon redemption and rely on professional fund management. The flexibility to make regular or one-off contributions helps you develop long-term savings discipline, allowing you to prepare for retirement efficiently and safely.

One of the biggest benefits of PPRs is the income tax deductions (20% of the amounts invested in PPRs are deductible from income tax), which can reach up to €400 per year, depending on the age of the subscriber:

*Per taxpayer.

This 20% tax benefit also depends on income and tax deductions. This means that the sum of tax deductions for health, education, training, health insurance, etc., cannot exceed certain overall limits set according to taxable income bracket.

Amounts paid after the date of retirement or amounts paid by third parties are not deductible, except when paid by employers on behalf of their employees (Article 21(8) of the Tax Benefits Statute).

No. Using the PPR tax benefit is optional and depends entirely on your decision. Every year, the Tax and Customs Authority automatically pre-fills the contributions made to the PPR in Annex H - Table 6B of Form 3 of the IRS.

If you do not wish to benefit from the tax advantage, simply remove these amounts from the declaration before submitting it. In this way, the PPR will function as a normal financial investment, and can be redeemed at any time, even outside the legally stipulated conditions, without any obligation to return the tax benefit granted.

However, you will continue to benefit from lower and more competitive tax conditions compared to other financial products.

Yes, most PPRs allow participants to make regular and/or one-off withdrawals, enabling them to adapt the plan according to their circumstances and savings goals.

Yes, you can request the redemption of your PPR at any time. However, the full tax benefits only apply if the redemption meets the legal requirements, such as reaching a certain age or being in a specific situation.

You can redeem a Pension Savings Scheme (PPR) without incurring tax penalties as long as it is done in one of the legally prescribed situations:

• Retirement due to the old age of the participant or their spouse, provided that the PPR is held in joint names;
• From the age of 60 of the participant of their spouse, provided that the PPR is held in joint names;
• Long-term unemployment of the participant or any other member of their household;
• Permanent incapacity for work, regardless of cause, of either the participant or any other member of the household;
• Serious illness of the participant or any member of their household;
• Payment of instalments of credit for permanent and own housing, including principal, interest, commissions, and other associated expenses. Redemption may be used for instalments that are due or will become due.

Additional conditions apply:

• In cases of retirement due to old age or at the age of 60 or over, only amounts corresponding to contributions made at least five years ago.
• In these situations, repayment of the entire PPR is only possible if at least 35% of contributions were made during the first half of the contract term.
• In cases of long-term unemployment, permanent incapacity for work or serious illness, this rule only applies to contributions made when the participant (or the relevant member of their household) was already in this situation.

If the Participant or their spouse dies, when the PPR is held in joint names:

• In the case of a PPR fund, the amount forms part of the inheritance and is passed on to the heirs in accordance with inheritance law.
• In the case of PPR insurance, payments are made to the designated beneficiaries or, if there are no beneficiaries, to the heirs.

Yes, the legislation permits the use of the PPR value to pay instalments on credit agreements secured by a mortgage on a property intended as your permanent residence, provided the legal requirements regarding time and percentage of payments are met.

If a Pension Savings Scheme (PPR) is redeemed outside of the legally prescribed conditions, a specific tax regime applies. This regime is provided for by law and remains more favourable than the regime applicable to most savings and investment products.

Taxation is levied exclusively on income and benefits from reduced rates, which decrease progressively depending on how long the investment remains in the PPR.

Taxation applicable to PPR income

If you redeem outside of the legal conditions, you may have to return any tax benefits obtained, plus any applicable penalties, depending on the tax regime in force.

Yes, you can transfer a PPR to another organisation or change its type, for example from a guaranteed-capital PPR to a non-guaranteed-capital PPR, or vice versa, depending on the investor’s risk profile.

It depends on the type of PPR:

• PPR without guaranteed capital:

The transfer is free of charge.

Under the law, it is illegal to charge transfer fees.

• PPR with guaranteed capital (PPR insurance):

A transfer commission may be charged under the terms set out in the contract, up to the legal maximum of 0.5% of the amount transferred.

Where applicable, the commission is only levied on the transferred amount and is legally capped at the established maximum.

No, transferring a PPR does not result in the loss of any existing tax benefits, provided the full amount is transferred to another eligible PPR.

No, the length of time that the investment has been held remains the same. This is taken into account from the date of the original contributions, even after the investment is transferred to a new PPR.

If you are already a Banco Carregosa customer, the process is simple. Just contact your Account Manager or Private Banker and we will take care of the entire process.

If you are not a Banco Carregosa customer, open your account here in 5 minutes and request the transfer of your PPR.

You do not need to redeem your PPR or deal with tax issues, ensuring a simple transition with no tax impact.