Seniors in Poland are increasingly faced with a choice: how to safe a decent pension erstwhile regular benefits do not cover basic needs? 1 of the solutions that is gaining popularity is the life pension, allowing the right to live for monthly financial support. Although specified agreements have been operating in the country for more than 17 years, this marketplace has inactive not been adequately regulated. The Ministry of Justice is planning changes to defend the interests of elder citizens, but the road to their introduction is inactive long.
What is Renta for Life?
A life pension is simply a form of contract in which a elder transfers ownership of his or her flat or home in exchange for a life financial benefit, usually paid monthly. At the same time, the elder retains the right to usage the property for the remainder of his life. specified a solution, although commonly associated with reverse mortgage, differs importantly from it, mainly due to the deficiency of bank participation in these transactions.
Composition
This product is complex and akin to actuarial statistics. The inability to foretell the minute of the client's death introduces a hazard component that must be included in the contract. In contrast to banks that would gotta insure specified risks in the commercial market, companies offering a life pension operate at their own risk.
Legal gap and the Rent marketplace for Life
There is presently a deficiency of precise government on life-long pension, which creates an area for abuse. The Ministry of Justice, in consequence to many signals and requests, is working on changes to safeguard the interests of elder citizens. The consultation process with the Ministry of Finance and the Ministry of improvement and the evaluation of the civilian Law Codification Commission are steps towards regulating this sphere.
The pension marketplace has been operating in Poland for more than 17 years and covers various forms of contracts, including life contracts, pension contracts and loans with the right to usage real property for life. According to the Ministry of Justice data, about 16 1000 specified contracts were signed between private individuals last year, while the mortgage funds “House” and “Family” associated with the Union of Financial Enterprises signed a full of 385 contracts.
The business of a life pension is associated with a advanced risk. Payoffs to seniors who live longer than the forecast are financed by those who leave earlier. There are legal disputes and dissatisfaction between household members, which makes this marketplace highly demanding. Despite this, mortgage funds consider it profitable, which is reflected in the value of the managed property, which amounted to PLN 158.5 million at the end of 2023.
The pension marketplace in Poland is not free from scandals for life. An example may be the case described by writer Violetta Krasnowska, concerning a criminal group that took over properties by poisoning owners with alcohol. Lawyers and notaries were involved, which shows how far abuse can go.
Although consumer complaints presently happen sporadically, the Office for Competition and Consumer Protection (UOKiK) has in the past analysed 37 life contracts, of which nearly half contained unauthorised contractual provisions. The UOKiK does not presently conduct proceedings in this area and not a single complaint has been received by the Financial Ombudsman.
Perspectives and the request for Regulation
The pension marketplace is increasing more rapidly and its importance is increasing due to the low pensions and the desire to keep the standard of surviving by seniors. Experts have been calling for appropriate regulations to safeguard the interests of older people for years. The first signals suggesting specified a request had already emerged in 2008, and the Ombudsman repeatedly raised the issue.
The first attempts to regulate the pension marketplace for life took place between 2011 and 2013, erstwhile in parallel, draft laws on reverse mortgage credit and life-long cash benefits were being drawn up. While the Reverse Mortgage Credit Act has been passed, the work on the life Money Benefit Act is stuck in place.
Current Initiatives
The Ministry of Justice is presently working on a task to regulate the pension marketplace for life. Cooperation with the Ministry of Finance, the Ministry of improvement and the civilian Law Codification Commission is intended to supply a comprehensive approach to the problem and make a legal framework to safeguard the interests of elder citizens.
The pension marketplace in Poland is simply a dynamically developing sector which can importantly improve the quality of life of elder citizens. However, the deficiency of appropriate government creates a field of abuse and risks that can lead to serious consequences for older people. Initiatives of the Ministry of Justice and cooperation with another ministries are a step in the right direction, which can bring about expected changes and improvements in the situation of this market.
At the same time, education of seniors on the possibilities and risks of a life pension is crucial. It is crucial for older people to have access to reliable information and to be able to make informed decisions about their properties and the financial future. Only in this way can it be ensured that a life pension will become a safe and beneficial solution for Polish seniors.
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The money for the apartment. life pension
