PPR refund without penalty expires at the end of the month

Redemptions are up in 2021, but new subscriptions are up. Deco advises not to withdraw.

To help families deal with the economic crisis caused by the measures taken in managing the pandemic, savings and retirement plans (PPR) are now allowed to be redeemed without tax penalty, outside the conditions established by law, until September 30, 2020 after which this system, which is exceptional, has been extended, But it expires at the end of this month.

Refund is possible, but only under certain conditions and the amount to be withdrawn cannot exceed approximately 400 euros. But Deco advises against doing so: “We don’t recommend a PPR rescue. If it’s not absolutely necessary, then it’s natural it’s not recommended,” says Antonio Ribeiro, economist at Deco Proteste. “The program performance reports are a long-term savings product. They are a financial cushion for reform,” he added.

What is certain is that if redemptions increase in 2021, so will the oversubscription of PPR. Most of this type of savings is allocated to PPR insurance, which guarantees capital. Since the beginning of the year, 468 million euros have been recovered from these plans, according to data from the ASF – the supervisory body for insurance and pension funds. This is an increase of 6.1% over the same period in 2020, but still less than the 10.5% annual growth recorded in the first seven months of last year. Subscriptions amounted to €846 million in July, an increase of 81.8% over the same period in 2020, when there was a 75% decrease.

For PPR funds, as of July, net contributions – including redemptions – were recorded at €594 million, according to data from APFIPP – the Portuguese Association of Investment, Pension and Property Funds. Since the beginning of the year, the assets of PPR funds have grown by 22.1% to 3,753 million euros. In July alone, net subscriptions reached 89.1 million.

According to António Ribeiro, there are risks even if families decide to get that PPR money back. “They can save at a time when prices are low and they can even lose capital.” He noted that in the back, acting on impulse should be avoided. “Over the past 12 months, there are funds with an average return of two decimal places,” he said. “It’s all about keeping calm.”

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The PPR must have been subscribed by March 31, 2020 and the refund cannot exceed the SSI monthly limit – €438.81.

Under what conditions

Refunds are possible, for example, in the event of protective isolation, unemployment, contract suspension or reduced working hours, if you received an AERT or had a decrease in average monthly income of more than 40%.