Public concerns spark higher pension savings
4 January 2006, BRUSSELS — The controversy around the federal government's 'generation pact' appears to have sparked the public into action, resulting in increased savings in pension plans.
4 January 2006
BRUSSELS — The controversy around the federal government's 'generation pact' appears to have sparked the public into action, resulting in increased savings in pension plans.
Public interest in supplementary private pension plans soared in the last part of 2005 amid warnings that state pensions will not be financially adequate in the future.
A survey of four major banks — Fortis, KBC, Dexia and ING Belgium — has revealed that investment in private pension plans increased last year by almost 20 percent compared with 2004.
The most noticeable surge took place in the 4th quarter of 2005, Flemish daily newspaper 'De Standaard' reported on Wednesday.
Fortis spokesman Wilfried Remens said it is not just people aged 40 or more who are saving for their pension. He said many younger Belgians are now also putting savings aside for retirement.
Recent tax incentives have played a role in the increase in pension savings. The government's generation pact increased the tax deductible amount for pension savings by 25 percent from EUR 620 to EUR 780.
The fact that taxpayers can claim more than a third (up to EUR 312) of that amount back via income tax rebates has been an important stimulus.
Many people with existing pension schemes have thus invested additional funds to benefit from the new rebate. However, the four banks said concern over the future of state pensions has also played a significant role.
Newspaper 'De Tijd' said EUR 10 billion was invested in pension schemes at the end of last year, compared with EUR 8.7 billion at the end of 2004.
It said the increased pension savings was due to their solid performance on the stock exchange, but also the public's move to benefit from the new tax deduction.
Confirming the report in De Standaard, De Tijd also said various banks are reporting an increase in new pension plan contracts.
[Copyright Expatica News 2006]
Subject: Belgian news