Retirement planning options

The most common sort of ‘pension’ is a unit-linked regular premium contract, which invests in a range of funds in the assurance vie fiscal framework. These plans are usually flexible and accept fairly low minimum monthly contributions and can be stopped and started when necessary. The main advantage of such policies is that there is no obligation to buy an annuity at retirement, where you may be stuck with low rates of return. In fact, it is possible to take the proceeds from the funds and invest in anything you think will provide a good return. Such policies would be suitable for clients who see their long-term future as being in France (and are therefore able to benefit from the assurance vie tax advantages at maturity).

For residents of Monaco or for expatriates who are unsure in which country they are likely to be living in future years, an offshore pension can provide flexibility because contributions can usually still be made from anywhere in the world. Such plans usually have a wide range of international funds in which to invest and accept contributions of any of the major currencies. At maturity, proceeds are paid out free of tax.

For French companies who want to set up a company scheme for employees, an ‘Article 83’ scheme can be used to make contributions which can be offset against tax. These schemes are very similar to UK pension schemes and can be used to motivate staff and maintain loyalty. The employer controls the extent of the contributions. This type of scheme might suit someone who wants to reduce his or her immediate income tax liability.

Self-employed French residents can also set up a similar scheme for themselves within the ‘Loi Madelin’ framework and they will receive the same kind of tax benefits. Once again, these have much the same advantages and disadvantages as UK pensions.