Pension Planning in Belgium

By - April 26, 2013 (Updated: December 1, 2014)

Be prepared for your retirement in Belgium

Be prepared for your retirement in Belgium

Today we are pleased to bring you this sponsored guest post about pension planning in Belgium. If you plan to be in Belgium during your Golden Years, read on to learn valuable information pertaining to your retirement savings.

Belgium has a system of pension planning different from many other countries in the EU. It relies on four pillars of pension arrangements that can be combined in order to give retirees the best possible start to their golden years. However, if you live in the country, or you’re planning to, take care when planning your pension arrangements, as Belgium’s tax system is one of the most punitive in the world.

The First Pillar – The State Pension

At around 12,000€ annually, the Belgian state pension is well below the EU average, so it is usually essential retirees have other arrangements in place. However, the exact amount a person is entitled to depends on a number of factors, including salary, the number of years spent in employment and family circumstances.

The Second Pillar – An Occupational Pension

There are certain tax benefits to be gained from building up a pension fund related to employment, but they differ according to whether the holder is self-employed or an employee. Larger employers in Belgium usually have group insurance policies or pension funds in place. This will deliver either a lump-sum payment upon retirement or a life annuity. The average amount this type of pension arrangement delivers to people in Belgium is around 70,000€. Unfortunately, those who are self-employed will have to contribute to their own private scheme, which can be very costly.

The Third Pillar: Personal Savings with Tax Breaks

Pension savings products in Belgium allow individuals to save up to 940€ per year without incurring taxation penalties. However, contributing to a recognised long-term savings plan gives people the chance to save up to 2260€, without having their funds eroded through added tax liabilities. BNP Paribas Fortis recently recommended people living in Belgium should combine the benefits of both long-term savings plans and pension savings schemes for maximum tax-relief.

With careful planning now, you can be set to enjoy your Golden Years

With careful planning now, you can be set to enjoy your Golden Years

The Fourth Pillar: Personal Savings

The final element to pension planning in Belgium involves ordinary savings accounts without tax breaks. People choose to supplement their retirement funds through basic savings accounts, but the maximum deductible amounts are small.

Of course, British expats in Belgium may have already been contributing to UK-based pension schemes for many years, and they will want to take the necessary steps to avoid paying tax on their income in two different jurisdictions. Fortunately, expat pensions can be protected from income tax, capital gains tax and, sometimes, inheritance tax liabilities to HMRC. A QROPS pension is usually held in a third-party jurisdiction, and as long as the scheme is recognised by HMRC, tax can be legally avoided. An overseas pension of this nature also means people can manage their funds in the local currency – the Euro in Belgium.

Talking to a financial advisor with specific experience in expat pensions could be the first step to protecting your hard-earned pension for a long and enjoyable retirement overseas.

Looking for more resources for living in Belgium? Check out our Expat Resources page.

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Alison Cornford-Matheson is a Canadian freelance writer and travel photographer and the founder of She is the author of The Foodie Guide to Brussels: Local Tips for Restaurants, Shops, Hotels, and Activities. Alison landed in Belgium in 2005 and, over the years, has become passionate about slow and sustainable travel, in Europe and beyond. She loves to discover hidden gems - be they museums, shops, restaurants, castles, gardens or landscapes, and share them through her words and photos. She has visited 45 countries and is currently slow travelling through North America in an RV, with her husband, Andrew, and two well-travelled cats. You can also follow her work on Google+
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