Published February 5, 2025
The Dutch pension system is widely recognized as one of the most robust and sustainable pension systems in the world. Designed to ensure financial security during retirement, it operates on a three-pillar model that integrates state support, workplace pensions, and private savings. This guide provides a comprehensive overview of the Dutch pension system, including how it works, the provisions available for self-employed individuals (ZZP), and what happens to your pension if you decide to leave the Netherlands.
The AOW (Algemene Ouderdoms Wet) serves as the first and foundational pillar of the Dutch pension system. It provides a basic level of income to individuals who have lived or worked in the Netherlands. The AOW is funded through taxation and administered by the Sociale Verzekeringsbank (SVB), a government agency.
Key features of AOW
Eligibility: Anyone who has lived or worked in the Netherlands is entitled to receive AOW benefits upon reaching the state retirement age, which is linked to life expectancy. By 2024, the retirement age is set at 67, with future increases based on demographic projections.
Amount: In 2025, the gross monthly AOW amount is €1,580.92 for a single-person household and €1,081.50 for couples, excluding an 8.00% holiday allowance paid annually in May. This pension covers only basic living expenses, making additional pension provisions necessary for a comfortable retirement.
Most employees in the Netherlands participate in employer-sponsored pension plans. These pensions are often mandatory in sectors with collective labour agreements, with both employers and employees contributing to the funds.
Transition to a new system
In July 2023, the Dutch pension system underwent a major reform, transitioning from a defined benefit model to a defined contribution model. Under the new system:
The third pillar allows individuals to supplement their retirement income through private savings, investments, and pension products such as annuities and life insurance. This is especially crucial for those without access to employer-based pension schemes.
Key features of the third pillar
Self-employed professionals, known as ZZP (Zelfstandigen Zonder Personeel), face unique retirement planning challenges. Unlike employees, ZZPs are not automatically enrolled in employer-sponsored pension schemes and must rely on the first and third pillars.
Staying informed about your pension is essential to ensure financial security in retirement. The Dutch government provides several tools to help individuals track their pensions.
The Netherlands, like many developed nations, is experiencing an aging population, which presents several challenges for the pension system.
If you decide to relocate abroad, your Dutch pension rights remain protected. Here’s what you need to know:
The Dutch pension system is designed to provide a secure and reliable foundation for retirement. Whether you are an employee, self-employed professional, or an international planning to move abroad, understanding how the system works is crucial for effective retirement planning.
The 2023 reforms have introduced greater flexibility and transparency, empowering individuals to take an active role in managing their pensions. Staying informed about potential changes and seeking professional advice will ensure that you make the most of the Dutch pension system and secure your financial future.
Rehive People is your trusted partner in navigating visa, immigration, and fit to measure relocation services in the Netherlands. With extensive experience in delivering tailored solutions for permits, residency, and complete relocation packages, we streamline the process for your company and international talent. Our personalized approach ensures a smooth transition, allowing your team to focus on their work and success. Choose Rehive People for a seamless relocation experience and a strong start in the Netherlands.
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