Have a PPR? Redeem it by the end of 2024 to increase savings

Increase savings with credits or insurance? Leave it to the credit intermediaries and insurance mediators at Poupança no Minuto. But first understand what you can do with your PPR until the end of the year.

Measure allows redemption of PRR until end of 2024 without penalties.

For those who have a retirement savings plan, education plan, or retirement/education savings plan, it is possible to redeem the product early, without tax penalties from January 2023 until the end of 2024. This is a measure implemented by the Government, which is in force and has now been extended to next year, allowing monthly redemption up to the monthly limit of the Index of Social Support (IAS).

So, those who have a PPR can withdraw 480.43 euros per month until December 2023 and 510.22 euros per month from January 2024, in order to increase their savings, invest or cover other expenses.  

This is a reminder from the Bank of Portugal (BdP), according to a news article released by Notícias ao Minuto. The entity's supervisor ensures that the refund “can take place without the need for a minimum five-year commitment for mobilization, as long as it concerns values ​​subscribed until September 30, 2022”.

Where can I redeem the PPR?  

Note that you can redeem the value of savings plans up to the monthly limit of the Social Support Index to increase your savings, and apply it wherever you need. If the goal is to save, you can apply it to an emergency fund. If you want to make the value grow, you can invest it. Or you can also use it to cover other expenses.

If you want to redeem, partially or totally, the value of the PPR without tax penalties or the need for a minimum five-year mobilization period, without value limits, you must apply it to: 

• To pay installments of credit contracts secured by a mortgage on property intended for the participant's own and permanent housing;  
• To pay installments for credit for the construction or improvement of properties for permanent housing;  
• Deliver to housing cooperatives for permanent own housing solutions.

It is important to emphasize that "the customer who requests a refund up to the monthly value limit of the IAS is not prevented from also requesting a refund for payment of installments of credit contracts secured by a mortgage on property intended for the participant's own and permanent housing, for payment of installments of credit for the construction or improvement of property for own and permanent housing, and for deliveries to housing cooperatives in solutions of own permanent housing, to the extent that they are exceptional regimes of cumulative application," as warned by the BdP.

Mortgage credit 

Finally, the BdP also emphasizes that it is possible to redeem PPR in advance without penalties and up to the annual limit of 12 months of the IAS, in order to repay own and permanent housing credit contracts in advance.

Considering that, once again, "this exceptional regime does not prevent the full or partial reimbursement of savings plans under the situations already legally provided for this purpose," guarantees the entity.

However, in the case of housing credit, if you do not want to give up the income from your PPR, there are other solutions so that you can save on the monthly installments.

As an example is the transfer of credit to a new bank: which will mainly take effect if your contract has a variable rate indexed to Euribor. By transferring, you may have access to the promotional campaigns that banks have been advertising, with mixed rates starting at 3.35% (compared to the 4% Euribor rates), fixing the rate for the next few years.  

Want to know more information and understand how it would work in your specific case? Contact the credit intermediaries of Poupança no Minuto for a free service that will accompany you throughout the process, if you wish to start.