Everything you need to know about pension savings in Luxembourg.
Which pension savings to choose in Luxembourg?
▼In September 2026, the best choice depends on your profile, and each profile has a clear winner. Cautious or near-retirement profile: LALUX easyLIFE Security — it is the only contract that guarantees the sum of premiums at maturity (term ≥ 10 years) on top of guaranteed capital. Dynamic, low-fee profile: Baloise Pension Plan — broad access to Amundi ETFs (MSCI World, S&P 500, Stoxx 600) and the only insurer to publish an SRI risk indicator per fund. Best guaranteed fund and flexibility/annuity: AXA MySmartPension — its Serenity fund returned 2.87% in 2025, after 2.72% in 2024 (versus the 2.15% profit-sharing LALUX granted for 2025 and 2.25% for 2024), with automatic securing and a spouse-reversible annuity. Note: LALUX has the lowest entry ticket (from €25/month, versus €50 elsewhere), ideal for small budgets/cross-border workers, and Foyer horizon banks on CapitalatWork's ESG wealth management. The tax deduction (€4,500/year) is identical for all: decide on fees, which over 20 to 30 years weigh heavily on the final capital.
How much does pension savings save in tax?
▼In 2026, you can deduct up to 4,500 € per taxpayer per year for pension savings (article 111bis LIR). Depending on your marginal tax rate, the tax saving can reach about 45 % of the premium, i.e. up to around 2,000 € refunded per year. For a couple, each spouse benefits from their own 4,500 € ceiling. It is one of the main tax-relief schemes in Luxembourg.
What happens on death before maturity?
▼On death before maturity, the accumulated savings (the contract value) are paid to the designated beneficiaries or heirs. Depending on the contract and the family relationship, this capital may be subject to inheritance tax. This is a point to check when designating beneficiaries.
What is art. 111bis pension savings in Luxembourg?
▼It is an individual old-age provision insurance contract, governed by article 111bis LIR. The premiums paid are deductible from taxable income up to €4,500 per taxpayer per year in 2026. It is the 3rd pillar of the Luxembourg pension.
How much can you deduct with pension savings?
▼The deductible ceiling is €4,500 per taxpayer per year since 1 January 2026 (up from €3,200). For a couple, each spouse can deduct €4,500 with their own contract. The tax saving can reach about 45% of the premium. This ceiling is separate from the €672 of article 111.
Guaranteed rate or investment funds?
▼The Security plan is based on a guaranteed rate and profit-sharing, with protected capital. The Performance/Dynamic plan invests in funds (unit-linked) to target a higher return, without guarantee. Most contracts allow combining both and adjusting the profile with age.
Which companies offer pension savings in Luxembourg?
▼The main life insurers offer a 111bis contract: LALUX (easyLIFE Pension), Foyer (horizon, CapitalatWork funds), Baloise (Pension Plan) and AXA (MySmartPension). They differ in their guaranteed rate, fund range, fees and payout options.
What conditions to benefit from the deduction?
▼The minimum contract duration is 10 years, and maturity must fall between 60 and 75. The maximum subscription age is generally 65. Early surrender outside serious illness or disability triggers taxation of the entire repayment at the normal rate and recapture of deductions.
How is the payout taxed?
▼At maturity, you can take capital, a life annuity, or a combination. Capital and withdrawals are taxed at half the global rate. The life annuity is 50% exempt, the balance being taxed at the pension rate.
Can cross-border workers benefit?
▼Yes, as long as they file a tax return in Luxembourg. Cross-border workers are explicitly targeted: they can subscribe to a 111bis contract and reduce their Luxembourg tax. Non-residents should check the treatment in their country of residence.
What is the impact of fees?
▼Entry fees (2 to 4.5%) and annual management fees (0.6% to 1.2%) reduce the final capital. Over 20 to 30 years, a management-fee gap of a few tenths of a point represents several thousand euros. Always compare fees in addition to the return.
From what amount and age can you start pension savings in Luxembourg?
▼You can start from €25/month with some insurers (LALUX), €50/month with others (Foyer, Baloise, AXA), up to the €4,500/year deductible limit. The minimum contract term is 10 years, maturity falls between 60 and 75, and you can subscribe up to about age 65. The earlier you start, the greater the effect of compounding and tax savings.
Can you withdraw pension savings before age 60 in Luxembourg?
▼No, except in cases of serious illness or disability. Article 111bis pension savings are locked until maturity (between 60 and 75); an early withdrawal outside those cases triggers full taxation of the capital and clawback of the tax deductions obtained. This is the trade-off for the tax advantage: treat this saving as long-term.
What is the difference between pension savings (3rd pillar) and the company pension scheme (2nd pillar)?
▼Luxembourg's system has three pillars: the 1st is the statutory pension (CNAP, compulsory); the 2nd is the supplementary pension scheme set up by your employer, where your personal contributions are deductible up to €1,200/year; the 3rd is the individual Article 111bis pension savings you take out yourself (up to €4,500/year deductible). The two caps are separate and can be combined.
