Popularity of higher tax caps on retirement savings continues to decline local

The previous federal government introduced a new cap on retirement savings under Pillar Three, where people can deposit more money with lower percentage tax benefits. In 2023, this amount amounts to 990 euros for a 30 percent tax reduction, or 1,270 euros for a 25 percent tax reduction.

The latter formula did not appeal to many Belgians in the first few years, but it is still losing popularity, say BNP Paribas Fortis and Belvius. At that first bank, just 4.06 per cent of those with a pension savings fund chose to increase the cap last year. In 2022, that rate was still 5.69 percent. Pension insurance relates to just 2.33 per cent of all savers, compared to 2.40 per cent the previous year.

In Bellevue, less than 1 percent of pension savers choose the highest amount, a number that is also declining. This proves that the small additional tax advantage of a higher tax ceiling is a hard sell for savers, the state bank said.

At ING Belgium, the number of people opting for a higher cap is still “very low (about 1 percent) but stable.” KBC also reports fairly stable numbers: last year, 9 percent of active pension savers at this bank opted for the higher cap.

Traditionally, pension funds remain more popular than retirement savings insurance. The flow was slightly lower in 2023, Belfius and ING say, or at the same level as the previous year (at BNP Paribas Fortis). KBC recorded “ever highest amount of deposits” in 2023.

The average return for superannuation savings funds was 6.4 per cent last year, according to Trends Weekly, but according to the business magazine there were significant differences between different funds.