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Private Clients - Switzerland

Advance Withdrawal/Pledge

You can also use retirement capital from 2nd or 3rd pillar schemes to buy your own home.

Employee Benefits Insurance, 2nd Pillar

The advance withdrawal or pledge of occupational retirement funds is governed by the Swiss Federal Law to Encourage the Use of Vested Pension Accruals for Home Ownership. The amount depends on the age of the person in question. A distinction is made between advances drawn up to age 50 and those drawn afterwards. Should you sell an owner-occupied home, you must pay the advance withdrawal you received back into your 2nd pillar pension scheme.

Pension Fund

Ask your employer for an up-to-date pension fund statement. This will show you your pension entitlement. Bring this statement with you to your personal consultation. You can arrange an appointment with your personal advisor or call 0844 855 100. Arrange a personal consultation online

Vested Benefits - 2nd Pillar

Vested benefits can be withdrawn or pledged as collateral prior to retirement.  Withdrawals are only permitted once every five years. Vested Benefits - 2nd Pillar

Overview

 

Advance withdrawal -
2nd pillar

Pledge - 2nd pillar

Impact on retirement assets

Reduction

No changes

Consequence

Reduction in benefits at retirement age, pension reduction in the event of disability or death (pension fund).

No reduction in benefits at retirement age (unless assets are seized owing to the realization of pledged assets).

Hedging

Insurance against the risks of death and disability is compulsory.

Insurance against the risks of death and disability is compulsory (hedging in case of realization of pledged assets).

Consent of spouse or registered partner

Required

Required

Conditions

The advance withdrawal does not affect the mortgage conditions.

You may be granted a reduction on the interest on your second mortgage if necessary.

Own funds

An advance withdrawal will be fully included in your own funds.

A higher collateral assignment may be possible.

Taxes

Tax on the advance withdrawal is due immediately upon pay-out (treated separately from other income and taxed at a reduced rate). The advance withdrawal cannot be set off against tax. Tax rates vary between cantons.

If the collateral is realized, you will be taxed and you are also liable for tax on your retirement savings (as is the case with an advance withdrawal).

Private Pension - 3rd Pillar

Savings held in 3rd Pillar accounts and/or savings with securities can be used as your own funds to purchase or construct a home that you are going to live in as your main residence (i.e. this does not include holiday homes). You can also make partial withdrawals every five years. Private Pension - 3rd Pillar

Pay-outs are taxed differently from canton to canton. Capital is taxed separately from other income and is subject to a reduced rate. Tax Authorities

Overview

 

Advance withdrawal
of pillar 3 funds

Pledging of pillar 3 assets

Usage

Retirement assets can be used for extraordinary repayment of an existing mortgage.

Retirement assets serve as additional collateral of a mortgage; benefits will not be withdrawn, but pledged.

Dates

Partial or total withdrawals are possible once every five years.

In principle, can be used at any time.

Taxes

On withdrawal, the retirement assets are taxed at a reduced rate and separately from your other income.

Retirement assets remain invested and can continue to grow.
Additional tax benefits
- Fully tax deductible mortgage interest burden, will remain the same
- Contributions to pillar 3a can be deducted from taxable income

Secondary Content

Advice and Contact

Telephone 0844 855 100

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