The government today announced a tax free private pension scheme and an individual saving account.

The scheme was announced by finance minister Edward Scicluna.

The contribution to the private pension scheme will be capped at €1,000 per year or €2,000 for a couple. A 30% payment will be made on retirement, and the rest of the money will be received monthly.

The money paid into the scheme cannot be touched until retirement.

The individual saving account will offer more flexibility, as the money deposited can be withdrawn at any time. The same €1,000 cap is applicable, and tax on interest is exempt.