The long-term savings program (LSP) offers two core benefits that have drawn attention in financial discussions: state co-financing and tax relief. These features are designed to help residents grow their personal funds while providing a safety net for future needs.
State co-financing works by adding a matching amount to an individual’s contributions during the initial three years. The precise amount the state contributes depends on the saver’s average monthly income. For example, saving 3,000 rubles per month over a three-year period could lead to a 108,000 ruble top-up from the state, effectively doubling the amount saved over that span. On top of this, there are tax advantages. The program makes it possible to reclaim a portion of previously paid personal income tax (13%), but the annual limit for these tax benefits is capped at 52,000 rubles per year. This means savers can reduce their tax burden on the funds contributed in the relevant year, up to the yearly limit.
Another important feature is the insurance and security of the funds. Savings within the LSP, including any investment income, are insured up to 2.8 million rubles. This provides a layer of protection in case of financial changes or life events. In serious situations, such as the need for costly medical care, funds can be withdrawn, and the program can offer additional state support. Importantly, money held in the LSP can be inherited and is protected from seizure or division in the event of a divorce, ensuring a degree of financial continuity for beneficiaries.
On the profit side, the program’s returns are tied to the performance of investments managed by non-government pension funds. Historical averages suggest annual yields around the low double digits, typically in the 10–11% range, though actual results can vary with market conditions. Prospective savers should weigh these potential returns against the inherent risks of investment-based products and consider how volatility might affect long-term plans.
Access to the LSP benefits is structured around a formal timeline. Participants begin to receive payments after at least 15 years of engagement with the program, or upon reaching ages 55 or 60, depending on the specific rules in place at the time. Withdrawal terms are also clear: all funds can be taken out without loss after completing 15 years of participation, providing a long horizon for growth and eventual liquidity. This framework encourages disciplined saving and long-term planning, while offering a cushion through the staged release of funds when needs arise.
The LSP was slated to become operational in Russia on January 1, 2024, marking a significant milestone in the country’s approach to long-term private savings. Ongoing policy updates can alter the features described, so current guidance from official sources is advisable for anyone considering enrollment. Earlier statements indicated there would be adjustments to the program from 2025 onward, including caps on the amount that could be returned from contributions under the LSP. Savers should stay informed about any changes that could affect co-financing, tax benefits, or withdrawal rules.