01.10.2025
The total amount of assets invested in the III pillar exceeded EUR 1 billion. In total, nearly 181,000 III pillar pension accounts have been opened, in which at least one investment has been made.
‘The steady growth in both fund volume and investor numbers confirms that investing in the III pillar is becoming increasingly popular among Estonian residents. Consistent contributions to the III pillar are one of the smartest ways to increase your future security, because the state refunds income tax on them,’ says Vahur Vallistu, Chairman of the Management Board of LHV Asset Management. From this year onwards, an EUR 0.22 income tax refund will be issued for every euro invested in the third pillar.
Vallistu pointed out that one of the best ways for investors to manage risk is to build a portfolio that generates regular income, which can then be reinvested. ‘Income tax refunds on the III pillar contributions can be effectively used to make further investments, which significantly boosts asset value growth over the long term,’ explained Vallistu.
This year, the total volume of the III pillar funds has grown by 13% and nearly 6,000 new III pillar pension accounts with assets have been added. History also shows that many III pillar investors time the majority of their contributions to occur just before the end of the year in order to find an outlet for the money in their current accounts that offers potentially good returns over a long period. ‘We see that a large number of people who have started investing in the III pillar are regularly increasing their contributions. In addition to one-time cash injections, customers increasingly prefer automated standing orders, which help maintain financial discipline and move them confidently toward their goals,’ noted Vallistu.
In his opinion, the III pillar has won the support of the Estonian people thanks to its flexibility. Everyone can build up a buffer for the future at a pace that suits them, and there are funds with different investment strategies on the market, so you can find one that suits you. ‘It is precisely this flexibility in terms of both deposits and withdrawals that has made the III pillar an attractive investment product for people of different ages. Today, the III pillar is often seen as a cornerstone of one's investment portfolio, offering the opportunity to tailor savings to different stages and needs throughout one's life,’ said Vallistu.
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