Private pension plan tax rebates capped at €300

Life insurance company MSV Life has become the first provider of personal pensions in Malta, developing long-term savings plans approved as 'Qualifying Personal Retirement Schemes', qualifying savers for tax rebates based on the amounts saved.

Under current legislation, savers may receive the equivalent of 15% of the amount saved each year up to a maximum of €300 if at least 18 years old and are domiciled or tax resident in Malta. Tax rebates are available if contributions are made on behalf of spouses.

The 15% tax credit is only available on contributions to registered pension plans.

MSV Life Plc - jointly owned by Mapfre Middlesea and Bank of Valletta - is offering two personal pension plans.

The savings must be left until at least age 50 and, at the time one takes the benefits, the maximum that can be taken as a lump sum is 30% of the accumulated value.

"The balance of the pot has to be used to provide an income, which could be through an annuity product effectively guaranteeing the income payments for life," Chief Officer of Business Development at MSV, Stuart Fairbairn said.

"The plans best suit those people wanting to make long term plans for their retirement and are prepared to leave the money invested until retirement date. The plans should not be viewed as short term savings or something which could be accessed on a rainy day."

The domestic life insurance market registered the sixth largest growth in Europe in 2013, with a 14% growth in gross written premiums. In 2014, the market registered a further growth of 24%.

Life insurance penetration in Malta is still at 59% of the EU average - the figure means that the Maltese are not saving as much as their European counterparts. The life premiums per capita in Malta are around 37% of the European average.