October is just round the corner, and summer is already beginning to be a distant memory. Did you know that this is the month of savings? In fact, World Savings Day is held on October 31. This date began to be marked on the calendars of half the world from 1924; however, in Spain it was not until 1928 – after the 40 savings banks of that time had been constituted – that this day began to be celebrated with the aim of encouraging a spirit of saving in every region.
Contributions to pension funds
The truth is that this is the month when many people begin to consider annual savings decisions. You still have time, for example, to make a contribution to your pension plan, which offers additional advantages in terms of reducing your personal income tax. In fact, although the maximum contribution limit has been lowered – from 8,000 to 2,000 euros – it is still worth doing since it will reduce the maximum marginal tax rate of your personal income tax.
Now that the government is thinking about imposing a minimum Wealth Tax rate across Spain, it is a good time to remember that the consolidated rights of Pension Plans are exempt from this wealth tax. In addition, they are not taxed as Inheritance Tax since they are not part of the inheritance, for example, in legacies between brothers or between uncles and nephews.
Remember that, in addition to pension plans, you can also opt for savings insurance. By means of a premium whose frequency you decide, you have instant access to its advantages. One of them is flexibility. Unlike the vast majority of banking products, with savings insurance you decide on the amount of your instalments, their frequency, and any extraordinary payments. In addition, you have access to your savings from the first year: you will not have to pay any type of penalty.
Another factor in your favor is that the profits made while your savings insurance accumulates are not taxed until the time you receive that money. This also offers significant tax savings.
Last July, record savings were recorded in Spain that had not been seen for eleven years. How about you? Do you plan to join this trend? Take advantage of the last quarter of the year to make your savings decision.