The economic recovery, with all its positive points, is showing a not-so-good face when it comes to saving. The percentage of disposable income left to Spanish households after paying their taxes is only 6.1%, which is the lowest level since the beginning of 2008 and half the average of the Eurozone (12.01% ), according to the latest statistics from the INE and Eurostat . The difference is remarkable when compared with countries such as Germany, which exceeds 17% or France where it approaches 14%.
All this makes it more essential to encourage savings for all types of needs: from those that are more short-term, to unforeseen or small projects, where products such as savings insurance are a great alternative or longer in the long term where retirement It is undoubtedly one of the fundamental objectives. To achieve this goal we can rely on different alternatives, among which are the Plans of Secured Insurance (PPA) and the Individual Plans of Systematic Savings (PIAS) , two options that may seem similar, but have important differences.
Differences and advantages of a PPA against a PIAS
The PIAS were created with the fiscal reform of 2007 with the aim of promoting long-term savings and within this end, but not only, also be able to supplement pensions. While the Retirement Plans among which are the PPAs this is their sole purpose.
Although they may coincide in this objective, the differences are important, the most important, taxation. The contributions to the PPA allow to reduce the tax base of the Personal Income Tax (IRPF) with a maximum of 8,000 euros or 30% of the net income from personal work and economic activities (the lesser of both), in the PIAS does not have this fiscal benefit. In return the tax advantages of the PIAS are produced at the time of the rescue, but with an important limitation, to obtain it must be in the form of life annuity and provided that their rescue has not occurred before 5 years of the constitution of the product .
In theory, PIAS are liquid products, which can be rescued at any time, although the reality of many products is very different, since they have high cancellation fees in the first years, which can even penalize 20% of the contributions . In addition, the rescue conditions of a PPA are not as rigid. On the one hand, there are special circumstances such as long-term unemployment or serious illness, but on the other hand, since February 2018 the royal decree has been approved that allows recovering all or part of what has been saved after 10 years of contribution and which can be accessed from the year 2025. A measure that improves the liquidity and attractiveness of PPA and Pension Plans .
Another disadvantage of the PIAS is its lower flexibility when it comes to changing your investment. In the PIAS, it is not possible to transfer for another product without cost, as if it occurs in a PPA that adapts much better to our variations of circumstances.
Finally, we must not forget how they invest these products. A PIAS can be a product without risk, with guaranteed profitability, but also in another type of PIAS whose profitability is not guaranteed nor the capital or contributions you make.
On the other hand, PPAs like the one offered by Aegon guarantee you the capital so you only have to worry about making contributions to get that capital or income that guarantees your pension.