Savings and Investing

A Retirement Savings Plan (PPR) is a medium- to long-term savings and investment product designed to help build wealth as a supplement to retirement income.

As a product intended for the long term, it has a set of characteristics that distinguish it from other financial products, namely tax benefits and more favourable taxation.

Capital Guaranteed PPR

• The invested capital is protected;
• It presents lower risk;
• It offers more stable returns, although generally more moderate.

Unit-Linked PPR

• The investment is linked to the performance of financial markets;
• It offers greater potential for long-term returns;
• There is no capital guarantee, meaning the value invested may rise or fall;
• Recommended for investors with a longer investment horizon and a higher tolerance for risk.

• In a Capital Guaranteed PPR, the return is defined by the rate applicable to the product and may vary over time.
• In a Unit-Linked PPR, the return depends on the performance of the financial assets in which the capital is invested.

A PPR, or Retirement Savings Plan, offers tax benefits:

• At subscription, or on entry

For personal income tax purposes, 20% of the amount invested per year may be deducted from the tax liability, subject to the following limits:

• Up to the age of 35, you may deduct up to €400, provided you invest €2,000 in your PPR, which is the maximum deduction;

• From 35 to 50 years old, you may deduct up to €350, provided you invest €1,750 in your PPR, which is the maximum deduction;

• After the age of 50 and until retirement age, you may deduct up to €300, provided you invest €1,500 in your PPR, which is the maximum deduction;

• For an investor under the age of 35, the tax saving may represent a €400 benefit if they invest €2,000 per year in a PPR.

On redemption

• A PPR may also be redeemed under very specific conditions without losing the tax benefit:

• Old-age retirement or from the age of 60;

• Long-term unemployment of the participant or any member of the household;

• Permanent incapacity for work or serious illness of the participant or any member of the household;

• Use of the funds to pay mortgage loan instalments on a property intended solely as the participant’s own permanent residence.

In the event of the policyholder’s death, the accumulated value is paid to the heirs or potential beneficiaries identified by the policyholder.

Although a PPR may be held for several years, it is a solution designed for the medium and long term. The longer the investment horizon, the greater the investment benefit tends to be.

Yes. Depending on the product, it is possible to make one-off or regular additional contributions to increase the accumulated value over time.

• 8% – when the redemption meets the conditions set out by law;

• 21.5% – if the redemption occurs before 5 years;

• 17.2% – if the redemption occurs between 5 and 8 years, provided certain conditions are met;

• 8.6% – if the redemption occurs after 8 years, provided certain conditions are met.

Yes, but the conditions depend on the reason for redemption. There are situations provided for by law in which the redemption may be made without tax penalty, such as:

• Old-age retirement;

• Long-term unemployment;

• Permanent incapacity for work;

• Serious illness;
• Payment of mortgage loan instalments for one’s own permanent residence, under the legally established terms.

In the event of early redemption, there may be two separate consequences:

1. Tax consequences, if you used the tax benefit for personal income tax purposes

If the redemption is made outside the situations provided for by law, you may have to:

• Repay the tax benefits obtained;

• Add a penalty corresponding to 10% for each year that has passed since the date on which you benefited from the tax deduction.

    2. ‎ Contractual penalty, applied by the insurance company

In Portugal, there is no standard penalty applicable to all PPRs. Redemption penalties vary depending on the product, the insurance company and the type of PPR.

In general, these are the most common scenarios: