The Dutch Pension System Explained - 2026 Update

The Netherlands is frequently recognised as having one of the strongest pension systems in the world and consistently ranks highly in the Melbourne Mercer Global Pension Index. This reputation is built on a well-balanced mix of funding sources, transparent measurement of costs and contributions, and strong supervision by both the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM), all of which help ensure fairness, sustainability, and long-term stability.

Compared with many other countries, the Netherlands is relatively well prepared to deal with the challenges of an ageing population, as its pension framework combines different funding models with a strong sense of solidarity and shared risk. Below, we explain how the Dutch pension system works, how retirement age is determined, and what you can do to plan effectively for the future.

The Dutch Pension System at a Glance

The Dutch pension system brings together a pay-as-you-go structure, in which today’s working population supports current pensioners, with an individual and collective investment system designed to build additional retirement income over time. These elements are organised into what are commonly referred to as the three pillars of the Dutch pension system:

• Pillar 1: The state pension (AOW)

• Pillar 2: Workplace pension funds

• Pillar 3: Private pension arrangements

Each pillar plays an important role, and for most people it is the combination of all three that creates a comfortable and reliable retirement income.

Pillar 1: The State Pension (AOW)

The foundation of the Dutch pension system is the AOW state pension, which is paid to anyone who has lived or worked in the Netherlands between the ages of 15 and 67. The amount you receive is based on how many years you were insured under the national system, as well as your personal situation when you retire, such as whether you live alone or with a partner.

In practice, this means that nearly everyone who has spent time in the Netherlands will receive an AOW pension, although the final amount is proportional to the number of qualifying years built up during their working life.

Pillar 2: Workplace Pension Funds

While the AOW provides a solid base, it is rarely enough on its own to maintain the lifestyle most people are used to. For this reason, around 90% of the Dutch population also participates in a workplace pension scheme arranged through their employer.

These pension funds are non-profit organisations that collect contributions from employees and employers, invest them collectively, and ultimately pay out pension benefits. The level of income you receive from a workplace pension depends on factors such as your salary, the length of time you have participated in the scheme, and the specific rules of your pension fund.

Pillar 3: Private Pensions

The third pillar consists of private pension solutions, which are particularly relevant for people who are self-employed, do not have access to a workplace pension, or simply want to build additional retirement savings.

Private pension options can take many forms, including retirement annuity contracts, dedicated pension savings accounts, life insurance policies, and long-term investments. Although these products are open to everyone, they require active planning and ongoing contributions to be effective.

Bringing the Three Pillars Together

The real strength of the Dutch pension system lies in the way the three pillars are designed to complement one another. By combining state benefits, workplace pensions, and private savings, it is possible to build a well-balanced and resilient retirement plan.

GPS Advisers can help you review what you have already built up, identify any gaps, and structure a plan that makes full use of available tax advantages while aligning with your long-term goals.

Pensions and Taxation in the Netherlands

The Netherlands operates a downstream taxation system, which means that pension contributions are partially or fully tax-deductible during your working life, while pension income is taxed when it is paid out in retirement. This approach is often advantageous, as many people fall into a lower tax bracket after they stop working, reducing their overall tax burden.

Retirement Age in the Netherlands

As in many countries, the Dutch retirement age has been gradually increasing over time. Since 2024, the official retirement age has been 67, following a series of incremental rises over previous years, and it is currently expected to increase further to 67 years and 3 months in 2028.

Early or Later Retirement

It is possible to retire earlier than the statutory retirement age in the Netherlands, although your AOW pension will only start once you reach that age, meaning you will need to finance the interim period yourself. In some cases, workplace or private pensions can be paid out earlier, but this usually results in lower monthly benefits, as the pension must last for a longer period.

Alternatively, choosing to retire later can lead to significantly higher pension payments, particularly for workplace and private pensions, while your AOW will still begin at the statutory retirement age.

Living Abroad and Dutch Pensions

If you move abroad, you may still be entitled to receive Dutch pension benefits, depending on your country of residence and the type of pension involved. In certain situations, people leaving the Netherlands may also qualify for remigration benefits through the SVB.

It is often possible to continue making voluntary contributions to the AOW from abroad for up to 10 years, although continuing workplace or private pension contributions can be more complex, especially if you move outside the EU.

Receiving Your Pension While Living Abroad

In many cases, your AOW pension can be paid while you live abroad, although taxation and social security rules will still apply. The rules for receiving workplace and private pensions vary depending on the pension provider and the country in which you reside.

If you are considering a move abroad, it is sensible to discuss your long-term plans with your pension provider or a financial advisor to ensure your pension arrangements continue to work for you.

Keeping Track of Your Pension

You can view an overview of your Dutch pension entitlements through mijnpensioenoverzicht.nl, which brings together your state pension, workplace pensions, and projected retirement income in one place. Access requires a DigiD.

Dutch Pensions in Summary

In summary, anyone who has lived or worked in the Netherlands will generally receive a state pension (Pillar 1), with the amount reflecting the number of qualifying years spent in the country. Workplace pensions (Pillar 2) depend on your employment history and pension agreements, while private pensions (Pillar 3) are only paid if you have actively saved or invested through individual pension products.

Together, these three pillars provide a robust framework for retirement — and with the right planning, they can offer both security and peace of mind for the future.