What vested rights arising from pension contributions can I redeem?
20/02/2025
Since 1 January 2025, members of pension plans in Spain can redeem the consolidated rights derived from contributions made more than 10 years ago without having to justify a specific cause (Royal Decree 62/2018, of 9 FebruaryAbre en ventana nueva).
The plans that can be rescued are the individual ones, in the case of employment plans, it must be established in the specifications of the plan itself.
This means that we can withdraw the contributions made to our plan along with the returns generated until December 31, 2015, and each year new contributions will be unlocked as they meet the same age. For example, from January 1 of this same year, contributions made until December 31, 2015 can be withdrawn. In 2026, it will be possible to rescue those corresponding to 2016, and so on.
Until now, pension funds could only be accessed in situations such as retirement, long-term unemployment, serious illness or disability. However, the new rules do not require any justification. It is enough to go to the managing body of the plan and request the withdrawal of funds that are more than 10 years old.
Although, in general, the provision can be made in two ways, the form of collection will be the one allowed by the plan, since it may not allow you to collect in the form of rent. These forms are:
- In the form of capital (all money in a single payment), which has a reduction of 40% for the above at 31-12-2006.
- In the form of income (periodic collection of a part of the fund).
If we are thinking about withdrawing this money, what factors should we take into account?
- Withdrawn money is taxed as income from work in the Personal Income Tax (IRPF), that is, it is as if you had another salary. Therefore, its tax impact will depend on the amount withdrawn and the taxpayer's tax base.
- Rescuing all capital at once can lead to a high tax rate, significantly raising the tax burden. Opting for the income modality can help reduce taxation, distributing income over several tax years.
- Early redemption reduces the savings available for retirement, as the money withdrawn no longer generates returns.
Is it advisable to withdraw the money from the pension plan?
If there are other financing alternatives, such as credits or savings available in checking accounts, it is prudent not to touch the pension plan before retirement, so it should be your last resort.
Although the possibility of having money without restrictions may be tempting, we must remember that this saving is designed to complement the public pension in retirement. It is essential to assess the fiscal impact, loss of future profitability and long-term financial planning.
The aim of these plans is to maintain financial stability in the future, so any rescue decision must be made responsibly.
“Disclaimer: Please note that this is a translation of the original in Spanish that has been obtained using eTranslation (the machine translation tool provided by the European Commission), with the intention of giving you a basic idea of the content in English until a human translation becomes available. The Banco de España accepts no liability whatsoever in connection with this translation.”
