Get Ready for Changes in 2025: What It Means for Your Finances and How Not to Be Caught Off Guard
In 2025, several key changes await us that will affect both employees and entrepreneurs. These new rules and adjustments will impact everyone’s wallet. If you want to take advantage of these changes, it’s wise to have a professional financial advisor by your side to help you navigate the new conditions, optimize your finances, and make use of available reliefs.
Changes in Pension Savings
Pension savings remain one of the possible pillars for securing your retirement. In summer 2024, the state contribution increased for everyone who contributes at least 500 CZK (€20) per month to their pension savings. The maximum state contribution will increase to 340 CZK (€13.60), which should motivate more people to save regularly for retirement. Unfortunately, many people still haven’t taken advantage of this option. Currently, around 3.5 million people in the Czech Republic use pension savings.
This product is state-supported and, thanks to tax reliefs, remains a very attractive choice for long-term saving.
Building Savings and Its Updates
Building savings in the Czech Republic is still among the most popular products, with more than 4 million contracts currently in place.
In 2025, no major changes are expected, but it’s still important to know the rules for the maximum state contribution, which amounts to 1,000 CZK (€40) per year if the client deposits at least 20,000 CZK (€800) into the contract. It’s also worth remembering that building savings has stopped being an excellent tool for pure saving. However, it may still have advantages when purchasing or renovating your own home. (For more on the (dis)advantages of building savings, see: https://stoneandbelter.cz/ma-cenu-sjednat-novou-smlouvu-stavebniho-sporeni-v-roce-v-2024/)
Long-Term Investment Product (DIP)
Long-term investment products (DIP) are becoming increasingly popular, with their main advantage being lower taxation of interest when withdrawing after the age of 60. This product is especially favored by those interested in flexible investments in stocks, bonds, and other assets. DIP remains supported by tax reliefs, making it a suitable tool for securing retirement. (More details here: https://stoneandbelter.cz/dip-investicni-produkt-na-penzi-pro-vsechny-od-zamestnancu-pres-milionare-az-po-rentiery/)
Insurance and Changes in the Area of Natural Disasters
Changes in insurance in 2025 will mainly affect coverage against natural disasters such as floods. Insurers will continue to apply a 10-day waiting period for floods and inundations. This means that if property is damaged during this period, the insurer will not pay out. This rule will also apply to other risks, making it important to be aware of all conditions and set up insurance correctly to minimize risks. A professional advisor can help you choose the optimal products that suit your needs.
Changes for the Self-Employed (OSVČ) in 2025
For the self-employed, changes in 2025 will affect mandatory advances for health and social insurance. The minimum monthly advance for health insurance will rise to 3,143 CZK (€125.72), which is 175 CZK (€7) more than in 2024.
The minimum monthly advance for social insurance will be calculated from an assessment base equal to 35% of the average wage, which will be approximately 4,786 CZK (€191.44). Self-employed persons engaged in secondary activities will have lower mandatory advances.
If entrepreneurs choose to use the flat-rate tax, it will increase in 2025 to 8,716 CZK (€348.64) per month for the first band. This method simplifies payments and is popular among those with lower incomes who want simpler administration.
2025 brings many changes in financial products that can significantly affect your financial situation. Whether it’s pension savings, building savings, long-term investment products, or insurance, having a professional financial advisor is crucial. We’ll help you navigate new rules, optimize your finances, and take advantage of all available reliefs. With well-set financial products and the right strategy, you’ll be better prepared for whatever 2025 and the years ahead bring.
Note: Fixed rate used: 1 EUR = 25 CZK.
