Why save for your pension in a socially responsible way?
Not only do you build up a potential pension pot for later, but you also only invest in securities and money market instruments issued by countries and companies that treat people and the environment in a responsible manner.
And that’s good for your future and the future of everyone else on the planet.
What exactly is meant by socially responsible pension saving?
• Only countries and companies that meet a number of strict selection criteria relating to the environment, social policy and corporate governance are considered.
• Independent experts provide advice and carry out strict checks.
• Various studies reveal that sustainable and socially responsible investments made in the past have met the market's expectations in terms of both return and risk.
You don't invest in:
• Manufacturers of controversial weapons, companies that seriously violate the principles of the UN Global Compact, government bonds issued by certain controversial countries.
• Agricultural crops or livestock, as we do not wish to be involved with food price speculation in any way.
• Tobacco, gambling, arms, fur, exotic leather and adult entertainment.
• Fossil fuels like oil, natural gas and coal (due to their excessive carbon emissions)
A specialised research team from KBC Asset Management monitors the situation, together with the SRI Advisory Board, which ensures that the SRI methodology (Socially Responsible Investing) is applied at all times.
What could socially responsible pension saving do for you?
When you start saving for your pension in a socially responsible way, you invest in a pension savings fund. A pension savings fund invests in shares and bonds and is therefore susceptible to fluctuations on the financial markets.
The advantage to this is that you stand a chance of achieving a higher return.
The flipside is that the size of your return and repayment of the capital sum you invest are exposed to market risk and therefore cannot be guaranteed. You also have to pay annual management fees.
When's the best time to start saving for retirement?
The sooner you start saving, the larger the potential amount built up for your retirement and, of course, the longer you can also benefit from tax relief.
If you start saving for your pension before your 55th birthday, you will have to pay a one-off final tax at a favourable rate of 8% on your 60th birthday. The tax is calculated on the total of your deposits and capitalised at a fixed rate of 4.75%. You then have the option of withdrawing your pension savings or continuing to save until the year in which you turn 64.
If you start saving for your pension on or after your 55th birthday, you pay a one-off final tax at the favourable rate of 8% after 10 years of the contract. If you decide to withdraw your money early, you will have to pay a higher rate of 33% (see 'D. Tax treatment' in the prospectus for more information).
Tip: start socially responsible pension saving before you turn 55 and keep saving even after your 60th birthday.
After the final tax has been paid, the amounts deposited are no longer taxed, although they can continue to qualify for tax relief.
Your tax break
Since 2018, you can choose between two maximum amounts (provided you pay sufficient tax):
• Option 1: save up to 990 euros per year
You qualify for a tax benefit of 30%, or up to 297 euros per year.
• Option 2: save up to 1,270 euros per year
You qualify for a tax benefit of 25%, or up to 317.50 euros per year.
If you save a lower amount towards your pension, you will not receive the maximum tax benefit. With KBC Brussels Touch and KBC Brussels Mobile, seeing how much still has to be saved to reach your chosen maximum amount is possible in just a few taps or clicks.
Save when you want
You can choose to put something away each month, starting from as little as 10 euros. An even better solution is to set up a standing order to save each month. But you can also invest the full annual amount in one go. Choose the method that works out best for you.
That way, you won't forget to make a deposit and you'll get the maximum amount of tax relief available to you.
How to get started
Socially responsible pension saving can be embarked upon in a number of ways and depends on your personal situation and investment profile.
Discover your possibilities at KBC
* The term ‘pension saving’ on this page means an investment in a pension savings fund.
** Note that as an investor, you can only open one pension savings account per taxable period. However, you can hold multiple contracts at the same time. If you have already entered into a contract in a previous year, you can start another one. You’re entitled to tax relief on just one of the two (or more) contracts.