Two private pension schemes were announced this afternoon, as part of the government's drive to encourage optional third pillar pensions. Finance Minister Prof. Edward Scicluna announced the details at a news conference.

Under the personal retirement scheme an individual may deposit up to €1,000 per year which will then go to a pension fund which would be redeemable at retirement age.

Thirty per cent of it may be then redeemed as a lump sum whereas the rest would be issued in monthly cheques. As an incentive the €1,000 deposit will enjoy tax incentives, meaning that depositors will save €150 a year in tax. In case of couples the capping will be of €2,000 a year.

The second scheme called the individual savings account has less fiscal incentives as only the interest accrued each year will be tax exempt. On the other hand depositors can redeem their sum before retirement age. The same deposit capping of €1,000 for individuals and €2,000 for couples will apply.

The finance minister said that early feedback from the financial services sector was positive.

He added that the aim was to encourage people with low income to save some  money each year to ensure a better pension.