A pension plan can offer significant savings on tax payments. which will be greater the higher the income of the participant.

This saving is because the amount of the pension plan contributions is deducted from the general personal income tax assessment basis, as long as you obtain earned income from work or economic activities. The annual contribution limit is 8,000 euros and the tax deduction limit is the lesser of the following amounts: the amount paid in or 30% of net earnings from work and economic activities during the financial year. Additionally, if your spouse does not receive earnings from work or economic activities or earns less than 8,000 euros a year, you will be able to deduct from your general personal income tax assessment basis the contributions to pension plans of which your spouse is the titleholder up to a maximum of 2,500 euros a year.

Once you begin to receive payments from your pension plan, the amounts you receive (benefits) are considered as earned income for tax purposes and the shareholder/taxpayer must declare them on their income tax return. Given that the way of receiving payments is flexible, it is important that you take advice on that which is most beneficial for tax purposes.

In the event of the death of the titleholder of a pension plan, the beneficiaries will pay tax on the amounts received as earned income on their personal income tax statement. They are not subject to Inheritance and Gift Tax.

This information is in accordance with the current legislation and may be modified in the future.

There are various ways to receive payment of the amounts saved in your pension plan. We recommend that before deciding on one of them, you take advice on which is the most beneficial for you in terms of taxation. The ways of receiving payment are:

• Capital: received in a single payment.
• Financial incomes: the amount is fixed that it wishes receive and the frequency until the end of the accumulated capital. In this way, you benefit from the interest that continues to be generated by the unconsumed capital in the pension fund. This formula can be adapted to your financial needs at any particular time, as it allows you to freely modify the amounts and the frequency of payment.
• Insured incomes: the amounts that receives are fixed and they hire with a company insurer, which him guarantees the charge of the income in the term previously set. The conditions of this income cannot subsequently be modified.
• Collections without regular frequency: the money is had in the shape of payments without an established frequency.
• Mixed: the combined provision, a part is charged in the shape of capital and another in the shape of financial incomes. The combination of the way of receiving payment can be freely modified.

On our website of the Pension Plans portal, within the Saving and Investment section, you will find all the information you need.

Through our simulator, depending on your age, your saving capacity and your return expectations, you can find out which plans best suit your needs and proceed with the sign-up process via Bankia Online.

If you prefer, you can also visit a Bankia branch.