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Pension insurance schemes to hit 200,000 mark by yearend

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By the end of the first half of 2016, nearly 153,000 pension insurance schemes had been bought, and the figure may even surpass the 200,000 mark by the end of this year, according to MNB statistics.

Pension insurance entered the market here three years ago and its popularity has been boosted by several factors. Whilst people are getting ever more skeptical what amount their final future pension might be, they can get a pension insurance with a Total Cost Figure of under 1%. On top of that, they can rake in the related tax incentives as well.

There are some 80 different types of pension insurance on the market. Those offering life insurance all have at least two or three variations of such products, says Katalin Bóna, managing director for life insurance at UNION Insurance.

Pension insurance payments enjoy tax incentives which amount to 20% per year, but cannot exceed HUF 130,000. In order to maximize the tax benefit, though, total yearly payments of HUF 650,000 must be made which is affordable for 2% only of those surveyed by UNION.

MNB statistics also underline that customers fall far from taking full advantage of the tax benefits: they pay HUF 200,000 on average into their pension insurance accounts, which make them eligible for tax benefits of HUF 40,000 the year after.

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