Insurance Plan Insured (PPA) versus Individual Plan for Systematic Savings (PIAS) What are the differences and advantages?

Image result for insuranceThe 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

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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.


Image result for cdtiThis instrument is co-financed by the Plurirregional Operational Program of Spain 2014-2020 and is intended for LIC A, LIC and Strategic R & D projects. This will help boost and promote R & D & i activities led by companies and support the creation and consolidation of innovative companies.

The financial aid will be linked to:

  • Strategic R & D : the consolidation of activities and R & D teams with a commitment to long-term investment that guarantees the innovative capacity of the company.
  • LICAs : the acquisition of assets, both tangible and intangible, framed in an innovative project.
  • LICs : the development of innovative activities with a general character, applied and close to the market within an innovative project.


How to manage your mortgage during a divorce

You can divorce your partner but unfortunately you can not divorce your mortgage. And just like your partner, your mortgage will take what’s right for you. One of the most stressful issues, when you go through a breakup or divorce, is the common debt. When getting a divorce, couples will not only divide the property, but they will also divide the responsibilities. Your mortgage is usually your biggest responsibility and should be managed fairly despite the conflicts that occur at home. Your mortgage lender does not care about your arguments and relationship issues. So put your emotions aside and handle the financial problems at your fingertips.

When buying your first home and putting your two names on a mortgage, couples almost never think how they will divide it if conflicts arise and the relationship fails. If you find yourself in such a situation, this article will help you decide how to divide your mortgage fairly.

Determine the value of the house

 Determine the value of the house

Before deciding what to do with your property and how you will divide the mortgage, you and your spouse need to determine the value of your home. Your house is probably your biggest asset and your most expensive debt, which makes it very difficult to divide. A real estate agent or appraiser could provide you with a detailed assessment of your home and how much it is worth. Once you have this value, subtract the balance owing on the mortgage, and you will get the current value or amount of capital related to your home. You and your spouse remain fully liable for the mortgage unless you sell the property or choose to refinance it. If you can not choose these options, explore the others carefully as they are very limited.



Sell ​​the house

Image result for sell the houseThe simplest way to manage the splitting of a mortgage is to sell the house. The divorced couple should sell their property, pay the mortgage, and continue with their own separate lives. A divorce is a pretty sad period as it is. Instead of putting more energy into slowly paying off the mortgage, sell the house right away and you will not have to worry about accrued interest charges. Even if your mortgage is worth more than your house (short sale), the money from the sale of the property could be used to pay off part of the mortgage. Although a short sale may affect the credit rating of both members, it may be preferable to keep the mortgage in certain situations. Sometimes the bank will even agree to release the borrowers with the difference to be paid during the short sale. Also, do not wait until the last minute to sell your house. If you think things are not working that there is a possibility that you have to take a break or separate from your partner, make sure you give yourself enough time so that you can sell your house for the amount that wish you. If you sell in a hurry, you will not get the money you want.



Another way to split the mortgage of a divorce couple is to refinance the mortgage under the name of one of the spouses. This is a practical but expensive solution as one spouse manages to keep the house, but costs are incurred to reorganize the mortgage. Refinancing your mortgage includes paying legal fees, appraisal fees, and possibly vacation expenses from your current lender. Thus, even if the refinancing is favorable, several costs can accumulate quickly. Since divorces are quite expensive as they are, it may not be in your best interest to spend even more money on refinancing. So make sure you with the money to refinance if that’s what you plan on doing.

Know that this option is not the best for everyone. Whoever keeps the house must meet certain criteria in order to prove that he can handle the mortgage debt by himself.

  • The couple must be up to date with their mortgage payments
  • At least one spouse must have good credit and sufficient income (you can not qualify for refinancing unless you have a positive credit rating, credit history and sufficient income).
  • One spouse agrees to leave the home to another. Once again, this may not be the best solution for you because of the demanding criteria and maintenance issues. Usually, it is very difficult for a single spouse to maintain a house. If you are struggling to get home with one income, do not refinance it. Instead, ask yourself if you can afford this house with an individual income.

Keep the house with the name of both spouses on the mortgage

Keep the house with the name of both spouses on the mortgage

This option is always a possibility, but usually a last resort. If you and your spouse can not make an agreement and can not sell or refinance the house, then you could keep the house with both names on the mortgage, while one of them moves. It is also the least favorable choice because the couple will have to fully report mortgage payments and other home-related costs on any future loan or credit application. This could prevent them from receiving another mortgage, thus hindering future financial needs.

Be responsible

Even if you are going through a tragic and emotionally difficult time in your life, it is still very important to stay on top of your finances. This means keeping a positive credit rating and credit history. Make sure you make payments on time and in full to maintain a high credit rating. Be responsible for your finances during this time and you will have access to better options for splitting your mortgage.