The Ministry of Finance asks people to spend in an information letter

According to the government decree, pension funds must inform members about the possibility at least twice. The formal and content requirements of the information letters are regulated by a ministerial decree, which is also submitted for public debate. However, the announcement did not reveal exactly what the public debate entails or what impact it may have on the final form of the legislation.

The aim is to stimulate economic growth

The intention behind the measure is to stimulate the economy. Economic Development Minister Márton Nagy has previously stated that the overly cautious financial behavior of the Hungarian population – for example, the preference for savings over consumption – could slow down economic growth. According to the government, the use of more than 2,000 billion forints of voluntary pension fund savings for housing purposes could stimulate the economy and increase VAT revenues, which provide a significant part of the budget.

According to the NGM, the use of pension fund funds for housing purposes could not only boost the economy, but also improve housing conditions, which could bring tangible benefits to Hungarian families. However, it is not yet entirely clear what exactly “use for housing purposes” means and under what conditions the opportunity could become available.

Tax exemption, but at what price?

According to the proposal, the use of pension fund savings for housing purposes would be tax exempt. This may seem like an attractive option at first glance, but experts say the question is whether it is worth shifting long-term retirement savings to short-term expenses. Although housing is an important basic need, the risk of the measure is that the money set aside for retirement may dry up prematurely, which may generate new social and economic challenges in the long term.

Social debate and uncertainties

The ministry is launching a social debate on the planned decree, but its exact course and expected impact are currently unknown. It is questionable for both the public and experts how the decree will affect the operation of the pension fund sector, savings habits, and the housing market. Clarifying the details and analyzing the potential risks is key to the success of the program.