European Pension Comparison: The Netherlands

Recently an article published in EWN highlighted the huge discrepancy between the average state pension in the UK compared to the Spanish equivalent. But how do they compare to other countries within Europe? Today EWN looks at the Netherlands.

According to Government.nl, the basics of eligibility for the Netherlands state pension, administered by the Sociale Verzekeringsbank (SVB), requires meeting specific criteria. To qualify, individuals must reach the state retirement age, which is gradually increasing.

Additionally, eligibility hinges on having a residential or work history in the Netherlands. This basic government pension, payable monthly, continues for the lifetime of the recipient, ensuring financial support in their retirement years.

Retirement Age In The Netherlands

According to business.gov.nl, the retirement age for accessing the state pension in the Netherlands is progressively changing. In 2024, it will reach 67 years and will be adjusted again in 2028 to 67 years and 3 months.

This adjustment applies universally, regardless of gender, making the retirement age the same for both men and women. The gradual increase in retirement age reflects broader demographic changes and the need to maintain the sustainability of the pension system​​.

Netherlands Average State Pension Amount

The average state pension amount in the Netherlands is linked to several factors, such as living arrangements (alone or with others) and the age of cohabitants.

According to information from svb.nl, The amount of state pension a person can expect to receive in the Netherlands depends on their living situation. As of July 1, 2023, individuals living alone receive a gross monthly AOW pension of €1,458.15. After accounting for a health insurance contribution of 5.43% (€79.17), the net amount is €1,378.98.

For those who are married or living with another adult, the gross amount per person is €993.16 per month. After the same health insurance contribution (€53.92), the net amount per person is €939.24​

The pension amount is pegged to the minimum wage, but the exact figures are subject to change and are updated biannually. Importantly, there is no distinction in pension payments between men and women, ensuring gender equality in state pension disbursements​​​​.

Unique Netherlands Policies Regarding The State Pension

The Dutch state pension system, known as AOW (Algemene Ouderdomswet), is unique in a few aspects. Firstly, it encompasses not only the basic state pension but also allows for the accumulation of supplementary pensions through employment.

Entrepreneurs, unlike regular employees, need to arrange for their supplementary pensions independently.

Additionally, the Netherlands has a provision for survivor benefits under the National Survivor Benefits Act (Algemene Nabestaandenwet, Anw), where a partner may be entitled to a portion of the pension rights in the event of the pensioner’s death, subject to certain conditions​​​​.

The Netherlands Comparison With UK And Spain

Statistics produced in October by Almond Financial gave the following European comparisons, known as the European Pension Breakeven Index. The study looked at 30 countries, their average monthly pensions balanced against the average monthly living costs, based on the recipient being mortgage-free.