Thessaloniki Fair: How the savings plan for Greece’s younger generation will work

Greece’s government has explained how the so-called “savings pot” for the younger generation would work, presenting the measure during the detailed rollout of Prime Minister Kyriakos Mitsotakis’ announcements at the Thessaloniki International Fair.

Parents would be able to open the special investment account for a baby during the first two years after birth. The state would deposit an amount matching the parent’s yearly contribution, up to €1,200 a year, until the child reaches 18. That ceiling would rise by 10% every five years, reaching €1,320 in 2032 and €1,452 in 2037.

Withdrawals would normally be allowed only after the child turns 18. Exceptions would cover the death of a parent or child, or serious health conditions requiring surgery, provided a public hospital certifies them. Once the child reaches adulthood, the accumulated amount would become a standard deposit account in the child’s name.

Income earned through the investment account would be exempt from income tax, including the 15% tax on interest, capital-gains tax on transfers, and dividend tax. The government’s example says that annual contributions of €1,200 from both the parent and the state would produce €49,304 in capital over 18 years. With interest, the total would be expected to exceed €60,000, and could rise above €70,000 depending on the investment product selected by the family.

Parents could contribute as much as €10,000 a year, a limit intended to prevent the account from becoming a vehicle for hiding wealth. Payments could be monthly, such as €100 through a standing order, or made whenever the parent chooses. If a parent makes no contribution in a given year, the account would remain active and continue earning interest, but the state would not contribute for that year. Each child could hold one account, provided at least one parent is a Greek tax resident. No income or wealth tests would apply. The funds would have to go into mutual funds, shares, corporate bonds traded on organized markets, or government bonds in Greece and the EU, with products offering different levels of risk.