Full definition
IKE is the 3rd pillar of the Polish pension system, introduced 2004 as a voluntary tax-advantaged savings vehicle. Key benefit: capital gains (interest, dividends, market-trading gains) are free of the 19% Belka tax — on condition funds are withdrawn after age 60 (or 55 plus pension eligibility). 2026 annual contribution cap: 26,019 PLN (3× average monthly wage). IKE can be held as: a bank account, brokerage account, investment-fund units, life insurance with a fund, Treasury bonds. Early withdrawal forfeits the tax benefit on the entire gain, plus loss of future tax advantage. Unlike IKZE (where contributions reduce PIT taxable income), IKE offers no upfront tax deduction. Most Polish savers combine IKE + IKZE for full tax leverage.
Concrete numeric example
Contributing 20,000 PLN annually to a brokerage IKE from age 35 to 60 (25 years) at an average 7% return = ~1.27 M PLN. Outside IKE, after Belka tax, the same contributions yield ~990,000 PLN. IKE tax benefit: ~280,000 PLN.