Important Changes to Czech Pension Savings Contributions in 2024: What You Need to Know

This year was supposed to bring relief for Czech households from a financial point of view. After the crisis years, it was supposed to be the first time in a long time that there was no unexpected problem. But the empty state coffers, which need to be filled again, came forward to speak. And what else but taxpayers’ money. Either those that don’t get married or those that are chosen extra.

Take an important step

As part of the consolidation package, practically all households in the Czech Republic will end up in a heavy loss. On the other hand, everything must be done to keep this deficit as low as possible. And in addition to harsh cuts, such as canceled kindergarten fees or a limited tax credit for a spouse, there are also things that can still be made good money.

However, you need to actively take care of your finances. It won’t work without important knowledge and at least a little help. As of July 1, 2024, the conditions for the payment of state contributions in the framework of pension savings will change. It’s not talked about much, even though it should be. You can lose as well as gain from the change. It depends on how you behave. What is certain is that you will not improve without your own intervention in the bank, either at a branch or in mobile banking.

It’s about how your standing order is set up for retirement savings, which almost everyone in the Czech Republic has, because it simply pays off. This order represents the amount you send each month to this pension savings. This is usually set according to your means and also takes into account the amount of the state contribution, which changes according to the amount you deposit. And right now, big changes are affecting him.

You can earn decent money

Currently, it is enough to send the amount of CZK 300 from your own resources to receive a state contribution of CZK 90. This is a ratio that was very advantageous, especially for those who did not save more. But it will be different from July. The minimum state allowance will be CZK 100, but in order to receive it, you must send at least CZK 500. If you want to receive it, you need to change the order at the bank.

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While the situation in terms of subsidies from the state worsens for amounts up to CZK 1,500, on the contrary, you will improve from this limit and above. The best thing to do is to send at least 1,700 CZK, because then you will lose the contribution of 340 CZK. It can’t go any further, so this amount is maximally effective. Compared to the current setting, this is an increase of 110 crowns, which is not small at all.

Foto: Shutterstock, resources: ČSOB, APSCR, MFČR