The draft of the General State Budget 2020 announces a big change in the taxation of pension plans. If they go ahead, this will be the last year in which participants in pension plans can benefit from a deduction of up to 8,000 euros in their personal income tax return: the maximum limit will be 2,000 euros per year.
It is clear that this decision will provoke a transformation in industry of pension plans, mandatory but necessary. It should not be forgotten that right now the national managers do not earn money and the threat hangs over them of the arrival, in 2021, of the international managers with their pan-European pension plans, which they will be cheaper and they will undoubtedly be better managed.
That restructuring, which for so many years has been postponed, is now going to accelerate. What can happen? Will have to lower commissions of their pension plans and improve their management. The Spanish investor has always looked at these savings products as a tax advantage, but never as a complement to their retirement. Now the tables will change, since if I have invested money that does not offer me profitability, and also taxation is no longer so interesting, I will look for other options.
That's where the investment funds, which also need a change to adapt to the new situation. With expensive and poorly managed products, which repeat the same problems of pension plans, independent managers have a good opportunity to capture a significant part of that money if they have a proven active management.
In any case, whether you choose pension plans or investment funds, you should always keep in mind three basic tips when investing in one: it must adapt to your risk profile, have low commissions and be well managed. Whatever you do, get your money out of bank deposits. Every day that passes has less value.