How the PER works: contributions, taxation and payout 2026

Understanding how the PER works has become essential for preparing for retirement since this product, created by the 2019 Pacte law, replaced the old schemes (Perp, Madelin). The retirement savings plan combines a tax advantage on the way in with long-term savings. Here is how it works, from contributions to payout.

A wrapper dedicated to retirement

The PER is a savings wrapper, like life insurance, but geared towards a specific goal: building an income top-up for retirement. You make voluntary contributions, at your own pace, and this money is invested across the supports you choose: a euro fund with guaranteed capital, or unit-linked supports with higher potential but no capital guarantee.

There are three compartments: the individual PER (open to everyone), and two company PERs (collective and mandatory). The most subscribed on a personal basis is the individual PER.

The tax advantage: deducting contributions

This is the PER’s main selling point. Voluntary contributions are deductible from your taxable income, up to an annual ceiling. For an employee, this ceiling corresponds to 10% of the previous year’s professional income, itself subject to a cap (indexed to the annual social security ceiling). The tax saving depends directly on your marginal tax bracket: the higher it is, the more advantageous the deduction.

Be aware: this deduction is an option. You can waive it, which then lightens the taxation on the way out. To compare policies and their fees, our guide to the best retirement savings plan (PER) details the market’s offers.

Locked savings… with exceptions

Unlike life insurance, the savings in a PER are in principle locked until retirement. The law, however, provides for early-release cases:

• the purchase of a main residence (voluntary contributions and employee savings);
• the death of a spouse or civil partner;
• disability (of the holder, their children, or their spouse);
• over-indebtedness;
• the expiry of unemployment rights;
• the cessation of self-employed activity following a court-ordered liquidation.

Outside these situations, the sums remain unavailable until departure into retirement.

The payout: lump sum, annuity or both

At retirement, the individual PER offers great flexibility. You can recover your savings:

• as a lump sum, in one or several instalments (up to 100%);
• as a life annuity, paid until your death;
• by combining lump sum and annuity.

The payout taxation depends on your initial choice. If you deducted your contributions on the way in, the corresponding capital is reintegrated into taxable income on the way out, and gains are subject to the flat-rate levy; if you did not deduct, only the share of gains is taxed. This is the key principle of the PER: the advantage obtained on the way in is partly recovered on the way out.

PER or life insurance?

The two wrappers are often complementary. The PER targets retirement, with a locking of funds offset by the tax deduction. Life insurance stays available at any time and covers more varied projects. The right trade-off depends on your horizon and your taxation.

These rules include nuances depending on your status and can change. For your situation, consult the official website service-public.fr or an accredited adviser. Past performance is not a reliable indicator of future performance.