All about pan-European personal pension products (PEPPs)

Saving for retirement across Europe has become an increasingly pressing issue, with close to 20% of EU citizens at risk of poverty or social exclusion in older age, according to an estimate by EIOPA (the European Insurance and Occupational Pensions Authority). To tackle this challenge, the EU introduced the Pan-European Personal Pension Product (PEPP), a voluntary, portable, cross-border pension framework designed to complement existing national pension systems and help close Europe’s substantial retirement savings gap.

This article explains how the PEPP works, how it compares with local pension products, what the reform proposed in November 2025 would change, and when it makes sense for your retirement savings.

What is a PEPP?

A PEPP (Pan-European Personal Pension Product) is a voluntary, long-term personal pension savings vehicle available to residents of the European Union. Created under Regulation (EU) 2019/1238, registered by national supervisors and listed in a central register kept by EIOPA, the PEPP runs alongside (not as a replacement for) existing national pension programmes such as:

• PPR: Plano Poupança Reforma (Portugal)
• Riester-Rente and Rürup-Rente: state-supported personal pensions (Germany)
• PER: Plan d’Épargne Retraite (France)
• Planes de Pensiones and PPA: Plan de Previsión Asegurado (Spain)
• IKE and IKZE: individual retirement accounts (Poland)
• Ratepension and aldersopsparing: personal pension savings (Denmark)
• IPS: Individuellt pensionssparande (Sweden)

The PEPP is designed to be portable, transparent, and cost-effective, and member states can give it the same tax treatment as their own personal pension products. The key innovation is cross-border portability: a German resident could invest in a PEPP offered by a Spanish or Lithuanian provider, take that PEPP with them if they move to Italy or the Netherlands, and continue contributing to the same account through a new national sub-account.

How does a PEPP work?

The PEPP is a separate, complementary pension layer, distinct from both state-based pensions (the public pension system) and occupational pensions (your workplace pension). It provides EU residents with an additional, optional vehicle to save for retirement, with all the cross-border flexibility and standardisation the EU’s single market enables.

The regulation has applied since 22 March 2022. It created a harmonised single market for voluntary personal retirement savings across the EU, conceptually closer to an IRA (Individual Retirement Account) in the US than to a workplace 401(k) plan, but adapted to the EU’s multi-country landscape.

The PEPP is designed to encourage long-term saving and investment, which supports two broader EU objectives: providing citizens with a credible private pension pillar to complement state and occupational pensions, and channeling more long-term capital into EU capital markets to support productive investment.

PEPP fees and costs

Specific fees vary by provider and product configuration, but the PEPP framework imposes a critical consumer protection: total annual costs and fees are capped at 1% of the saver’s accumulated capital for the Basic PEPP, the default investment option. This cap covers administration, asset management and distribution costs combined.

A provider can offer up to five other investment options alongside the Basic PEPP, which can cost more. However, under the current rules every PEPP must include the Basic PEPP as the default, fee-capped choice. The reform proposed by the European Commission in November 2025 would remove the 1% cap and replace it with a value for money assessment (see below).

Who can provide a PEPP?

Under the PEPP regulation, the following types of financial institutions are eligible to offer Pan-European Personal Pension Products:

• EU-authorised credit institutions (banks)
• EU-authorised insurance undertakings
• Institutions for Occupational Retirement Provision (IORPs) allowed to offer personal pensions
• Investment firms providing portfolio management services
• EU UCITS management companies (Undertakings for Collective Investment in Transferable Securities)
• EU Alternative Investment Fund Managers (EU AIFMs)

Despite this broad range of eligible providers, PEPP adoption has been notably slow since the regulation came into force in 2022. Only a handful of PEPPs appear in the EIOPA central register, far fewer than the European Commission anticipated. The usual explanations are the patchy tax treatment across member states, the 1% Basic PEPP cost cap, which leaves little room for traditional distribution, the obligation to offer national sub-accounts in at least two member states within three years, and limited consumer awareness.

The best-known PEPP provider to date is Finax, a Slovakia-based robo-advisor. The main features of the Finax PEPP are:

• Minimum investment: €10.
• Fees: a 0.6% annual fee plus VAT. Finax quotes a total cost of about 0.9% a year for the Basic PEPP, including VAT and the fees of the underlying ETFs.
• Two lifecycle strategies: Basic 100/60 (100% stocks while you save) and Alternative 80/60 (80% stocks). Both start moving into bonds 10 years before retirement and reach 60% stocks and 40% bonds at retirement age.
• Investments: broad-market exchange-traded funds (ETFs) covering global stocks and bonds.
• Management: fully online, through the app.
• Portability: open to residents of any EU member state. If you move, you can open a sub-account in your new country of residence and transfer your savings to it.
• Payout: a lump sum or phased withdrawals at retirement age, and savings can be inherited.

Who is the PEPP for?

This cross-border pension product is open to a wide range of savers and investors between adulthood and retirement age:

• Individual EU residents looking for an additional retirement savings vehicle alongside their state and workplace pensions.
• People employed full-time, part-time or self-employed: the PEPP is also available to people who are unemployed, on parental leave, or in education.
• Mobile professionals who work or expect to work in several EU member states, for whom the PEPP’s portability is most valuable.
• Employers that want to contribute to their employees’ PEPPs, where national law allows it.
• Self-employed and gig economy workers in EU countries where local self-employed pension options are limited or expensive.

Key features and advantages of PEPPs

The main features and advantages of the PEPP:

• Cost-capped: total annual costs on the Basic PEPP option are capped at 1% of accumulated capital under the current rules.
• Transparent: all costs, fees, risks, and projected outcomes are disclosed upfront in the PEPP Key Information Document (KID), with standardised disclosure rules across providers.
• Portable across the EU: you can keep contributing to the same PEPP if you move between EU member states, with no need to start over with a new local pension each time you relocate.
• Provider switching: you can switch PEPP providers after at least five years from opening the PEPP or from your last switch, and the switching fees are capped at 0.5% of the amount transferred.
• Protected default option: the Basic PEPP must either guarantee the capital invested or use a risk-mitigation technique, such as a lifecycle strategy that reduces exposure to volatile assets as you approach retirement.
• Tax-efficient (in some jurisdictions): exact tax treatment varies by country, but PEPPs are designed to qualify for the same tax incentives as comparable national pension products where member states have implemented this.
• Harmonised rules: every PEPP follows the same EU regulation, is registered by a national supervisor and appears in EIOPA’s central register.

Main disadvantages of a PEPP

The PEPP framework has notable drawbacks to consider:

• Limited provider availability: despite the 2022 launch, PEPP adoption has been slow, with only a handful of providers offer PEPPs across the EU, limiting consumer choice and competitive pressure.
• Uneven tax treatment: tax incentives are determined by each member state, and implementation has been patchy. Some countries provide full tax treatment alignment with local pensions, others provide partial alignment, and several have not yet implemented PEPP-specific tax legislation at all.
• Locked-in until retirement: like most pension products, PEPP savings are generally inaccessible until retirement (or specific qualifying life events), making it inappropriate for shorter-term savings goals.
• Opportunity cost vs local pension wrappers: in countries with generous tax-advantaged local schemes (for example German Riester, Portuguese PPR or Polish IKE/IKZE), local options may offer better tax treatment, so the PEPP often makes most sense after you’ve used your local pension allowances.
• Withholding tax complexity: cross-border investment income within a PEPP may be subject to withholding taxes at source, with recovery depending on the bilateral tax treaty between your country of residence and the investment’s source country.
• Rules in flux: the regulation has only applied since March 2022, and the Commission’s 2025 reform proposal could change the Basic PEPP, the cost cap and portability before many savers retire.

How tax incentives work

This is where the PEPP framework genuinely complicates matters. While the product is designed for pan-European use, each EU member state retains sovereignty over personal income tax, including how pension contributions and withdrawals are taxed. The European Commission and EIOPA have strongly recommended that member states extend the same tax treatment to PEPPs as comparable national pension products, but implementation has varied:

• Member states that have aligned PEPP tax treatment with comparable local pensions. In Slovakia, for example, Finax states that contributions of up to €180 a year reduce the tax base.
• Member states with partial alignment: some tax incentives apply but not the full local pension treatment.
• Member states with no specific PEPP tax legislation: PEPP contributions and withdrawals may be treated under generic investment rules rather than enjoying pension-specific tax advantages.

This patchy tax framework is widely cited as the single biggest practical limitation of the current PEPP regime. Before opening a PEPP, verify the specific tax treatment in your country of residence and compare it carefully against the tax-advantaged local pension options available to you. In countries with strong existing pension frameworks (Germany’s Riester/Rürup, Portugal’s PPR, France’s PER, Poland’s IKE/IKZE, etc.), the PEPP may not offer meaningful tax advantages over local alternatives.

EIOPA’s PEPP portal publishes the national information sent by each member state, the most authoritative source for current tax treatment by country.

Is the PEPP safe?

The PEPP operates under a single EU regulation, with rules on costs, disclosure, the default investment option and switching that every provider must follow. Like any investment, the value of a PEPP can go down as well as up, unless you choose an option with a capital guarantee.

PEPP supervision operates on two levels:

• EIOPA (European Insurance and Occupational Pensions Authority) sets the EU-wide supervisory standards, maintains the PEPP central register and coordinates cross-border supervisory cooperation between member states.
• National regulators (such as BaFin in Germany, ACPR in France, CMVM/ASF in Portugal, KNF in Poland) supervise PEPP providers operating within their jurisdiction.

If you need to file a complaint, start with the provider itself and then the national supervisor or the out-of-court dispute body in your country of residence. Any protection if the provider fails depends on its licence type (bank, insurer or investment firm), not on the PEPP label.

How is the PEPP being applied across EU jurisdictions?

PEPP implementation remains a work in progress across the EU. Member states have been at very different stages of adapting their national rules, particularly around the tax treatment that determines whether the PEPP is genuinely attractive in each country.

Finax, for instance, accepts residents of any EU member state, but says transfers between its PEPP and local third-pillar products are possible in some countries (Poland, the Netherlands and France) and not yet in others. For the current status in your country, consult the national information on the EIOPA PEPP portal.

The 2025 reform proposal

On 20 November 2025, the European Commission proposed a review of the PEPP regulation as part of a supplementary pensions package. The main changes would be:

• No more 1% cap: the Basic PEPP cost cap would be replaced by a value for money assessment.
• New Basic PEPP: a simple, life-cycle option sold without advice, while “tailored” PEPPs with guarantees or more complex assets would require advice.
• Optional portability: providers would no longer have to offer national sub-accounts in at least two member states.
• Workplace use: employers could contribute to their employees’ PEPPs, and member states could allow auto-enrolment with the right to opt out.
• Tax: member states would have to give PEPPs tax treatment comparable to their national personal pension products.

The Council agreed its position on 24 June 2026, keeping the removal of the cost cap but dropping the tax parity obligation. The European Parliament has yet to adopt its position, so none of these changes is in force and the final text can still change.

The PEPP and European robo-advisors

The European retail investment market, fragmented across multiple languages, tax frameworks and financial regulations, has historically been a difficult environment for robo-advisors to scale across borders. To expand from one EU country to another, robo-advisors typically need to develop separate investment strategies that accommodate the local tax framework, regulatory requirements, and currency considerations in each new market.

This fragmentation means European robo-advisors generally can’t achieve the same economies of scale as their US counterparts like Betterment or Wealthfront, which operate across a single large market. The result is often higher fees, smaller product ranges, and slower innovation than US equivalents.

This is why the PEPP is particularly interesting for the European robo-advisor industry: it provides a single regulatory framework that allows a robo-advisor to offer a pension product across all EU member states without needing to navigate dozens of separate national frameworks. In theory, this should help national robo-advisors grow into pan-European players, although the patchy tax incentive alignment has so far limited how quickly this expansion has materialised. Finax is the leading example of a national robo-advisor using the PEPP framework for cross-border expansion.

Final thoughts

The PEPP has the structural ingredients to become a meaningful pillar of European retirement saving: harmonised EU-level regulation, cross-border portability, cost caps, transparency requirements and the potential to bring competitive pressure to a fragmented pension industry. However, its success depends on each member state’s willingness to align tax treatment with local pension alternatives, and that alignment has been slower and more uneven than the European Commission originally hoped.

For most European retail savers, the practical takeaway is:

• Maximise your local tax-advantaged pension allowances first (Riester/Rürup in Germany, PPR in Portugal, PER in France, IKE/IKZE in Poland, etc.) before considering a PEPP.
• Consider the PEPP if: you’re a mobile EU professional likely to live in multiple member states across your career, work in a country where local pension options are limited or expensive, or want low-cost diversified retirement exposure that doesn’t tie you to any single country.
• Verify the specific PEPP tax treatment in your country before committing, particularly whether contributions are tax-deductible and how withdrawals will be taxed.

Keep an eye on the 2025 reform: if it is adopted, the Basic PEPP and the cost cap will change, and more providers and employers may start offering PEPPs.

Can I open a PEPP in another EU country?
Yes. A PEPP can be bought from a provider in any member state, as long as it offers a sub-account for your country of residence.

What happens to my PEPP if I move to another EU country?
You open a new sub-account for your new country of residence and keep saving in the same PEPP, or switch to another provider if yours does not cover that country.

How much does a PEPP cost?
The Basic PEPP is capped at 1% of your savings per year under the current rules. Finax quotes about 0.9% a year all-in for its Basic PEPP.

Can I withdraw my PEPP savings early?
Generally not. Savings are paid out at retirement age, except in cases set by national law.