Use your retirement savings to finance your own home.

You can use the pension savings you have built up in Pillar 2 and Pillar 3 to finance an owner-occupied residential property. You can either withdraw or pledge your retirement savings for this purpose. This does not include financing for vacation houses and apartments and second homes.

Early withdrawal or pledging of Pillar 2 retirement savings

You can use the assets from your Pillar 2 public pension fund (BVG) to finance your home purchase. You can either pledge your vested benefits capital or make an early withdrawal from these savings.

Early withdrawal of your Pillar 2 assets

You can have your vested benefits capital paid out to pay part of the purchase price. To take advantage of this option, you must be able to make up the resultant pension provision shortfall from private retirement savings. You have to pay tax on the capital withdrawn from your account. This tax is calculated independently of your other income and cannot be paid from the sum withdrawn. You therefore have to make a separate sum of money available for this tax liability. The tax may be up to 10 percent of the early withdrawal. In addition, any early withdrawal is subject to a restriction on the right to sell the property. Make sure you plan ahead: depending on the pension fund, it may take several months for the funds to be paid out.

Pledging your assets as a substitute for capital

If you choose the pledging option, your vested benefits savings stay in the pension fund. The advantages are that you preserve the full benefits of your occupational pension plan and can benefit from its preferential rate of interest.

Your pension fund will be able to tell you how much capital you have available in your Pillar 2 savings. In both cases (early withdrawal and pledging), you have to finance at least 10% of your property’s market value from your own funds, i.e. from capital not drawn from occupational pension savings.

Encouragement of home ownership from the age of 50

Up to the age of 50, you can make an early withdrawal not exceeding the current level of your vested benefits. From the age of 50 onward, you can draw on the vested benefits to which you would have been entitled at age 50, or half of the vested benefits at the time of withdrawal, whichever amount is greater.

Example calculations

Example 1

Example 2

Vested benefits at age 50

CHF 30,000

CHF 30,000

Vested benefits at age 55

CHF 40,000

CHF 80,000

Potential early withdrawal at age 55

CHF 30,000

CHF 40,000

Pledging your Pillar 2 assets as a substitute for capital

If you choose the pledging option, your vested benefits savings stay in the pension fund. The advantages are that you preserve the full benefits of your occupational pension plan and can benefit from its preferential rate of interest.

Do you have any questions about retirement savings?

We’ll be happy to advise you at one of our branches or at our
UBS Service Line at 0848 848 054.

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