Personal Pension Savings
Personal pension savings are voluntary but serve as an important pillar of the Icelandic pension fund system. Everyone earning wages in Iceland is advised to utilize their right to contribute to personal pension savings, as it is one of the most efficient form of savings available.
The main advantage of personal pension savings is that employers in Iceland provide a counter-contribution of up to 2% when their employees contribute to personal pension savings, effectively giving you a 2% raise. Among other benefits are:
- Contributions paid are not subject to income tax, thus creating a tax benefit.
- The savings are private and may as such be inherited.
- Balances in individual retirement accounts are neither subject to net wealth tax nor to capital income tax.
- Such balances do not count in the computation of tax-related children's benefits or interest rebates from the state.
- Withdrawal can commence at the age of 60, with flexible payments according to your needs.
- Disposable income during the pension years is augmented and the personal tax allowance is more fully utilized.
- This form of savings is convenient as the employer handles the process of monthly payment process.
- Temporary measures are in place which allow you to allocate your personal pension savings towards your mortgage, which is a cost-efficient way to decrease your debt.
To qualify for membership to personal pensions savings at LSR you must be a member of the LSR general pension funds or have paid contributions to those pension funds previously.
Start saving today - it is easy to apply for personal pension savings at LSR. Just fill in the below form and sign with your electronic ID:
If you don't have electronic ID, you can apply by filling in our PDF-form, sign it and send a scanned copy to idgjold@lsr.is. We will handle the rest! If you have any further questions or need additional assistance, please feel free to contact us at the above e-mail address or by calling us at 510 6100 .