Go Dutch: what can we learn from saving, Netherlands style?

Elle Tucker

The Netherlands boasts one of the best retirement and pension systems in the world and ranks in the top five happiest nations. So what can we learn from the Dutch when it comes to saving towards a happy future?

What do you think of when someone mentions the Netherlands? Maybe it’s the iconic artists, the famous cheese, or you’re partial to canal life. Perhaps it’s cycling, which the Dutch are passionate about.

With its enviable standard of living, it could be ‘Niksen’, the Dutch answer to Danish ‘Hygge’, which celebrates the joy of doing nothing much but relaxing.

But there’s yet another reason we can look across the North Sea for inspiration.

The Netherlands is No1

The Netherlands has been named as the country best prepared to meet the challenges of saving for and funding retirement, by the Melbourne Mercer Global Pension Index.

The index, which looked at 34 countries, shows that the Netherlands has a world-class retirement income system well prepared to meet the needs of its ageing population.

Three pillars of saving

So what takes the Dutch pension system to the top of the list?

The Dutch system has three main pillars. What people receive when they retire will be made up of a combination of their workplace, individual and state pensions.

Good employer pensions mean most Dutch people have a pension from their work. Although similar to UK workplace pensions in some ways, most Dutch schemes operate on a ‘collective’ basis, meaning the investment returns are shared between those who are working and people who have retired. This helps to smooth out returns across generations.

Those who don’t have a pension through work can arrange an individual one.

Much like in the UK, the Dutch state pension is quite basic and the age at which people get it is going up: currently, from age 66 Dutch people get about €700 a month each (around £630) for those living as a couple and €1000 (around £900) for those living alone. Soon, their state pension age will be linked to average life expectancy.

Although not perfect, the Dutch model shows that having a mix of a generous workplace pension, individual pension and a state pension is helping many to enjoy a more comfortable lifestyle when they retire.

And that’s good news when you consider that the world’s tallest nation is also one that lives longer. The Dutch live on average a year longer than we do in the UK and are in the world’s top 20 for longevity.

Dutch lessons?

The fact is we already have a lot in common.

Many in the UK are living longer than previous generations, and that’s changing how we need to save for what might be a long retirement.

Just like in the Netherlands, the UK is doing what it can to encourage people to save through auto-enrolment, where employers automatically enrol their eligible workers into a workplace pension scheme.

One advantage is that, unlike any other way of saving, an employer normally contributes as long as you do.  Around 10m people have joined since it started in 2012.

UK State Pension changes – what you need to know

Another thing we have in common is an increasing state pension age.

In 2018, the UK State Pension age became the same for men and women for the first time at age 65 – and next year it’s age 66.

That means people will have to wait longer for it and – at around £8,700 a year for most people – it’s unlikely to be enough to rely on. Read The State Pension – what do I need to know? for more.

All this means that in the UK, just like in the Netherlands, there’s even more reason to take saving for the future into your own hands.

If you do, you’re more likely to be able to decide what your future looks like.

And thanks to UK pension freedoms, introduced in 2015, we can all have more of a say in when and how we stop work – or work less – and how we take our pension, normally from the age of 55 (though this age may change in future).

Find your happiness

So if ‘Niksen’, that Dutch word for making time to do absolutely nothing every so often, is what you want to do when you stop working, in amongst travel, hobbies, setting up your dream business or whatever else you’re planning, that will be up to you.

After all, the Dutch rank as the fifth happiest nation in the world (out of 156 countries), according to the United Nations World Happiness Report, so they’re doing something right.

Whatever you do, you’ll have more choices if you’re in control of your savings for the future.

Make the most of your pension savings? Here are four simple ways

  • Find out how your pension savings are shaping up using this simple pension calculator, or get more from the Money Advice Service, which has great information on starting out and saving throughout your life.
  • If you can’t find your pension details and have lost track of a pension, contact your provider or the government pension tracing
  • Find out when you’re eligible for the UK State Pension and what you’re likely to get, just like 13 million others have, by checking on the Government’s website – knowing can help you make plans.
  • Talk your finances through with your adviser if you have one and consider all your possible income sources – you may have other investments or equity tied up in your property.

If you don’t have an adviser, try to find one in your area, visit our website for more on financial advice or get in touch with 1825, Financial Planning from Standard Life*.  There’s likely to be a charge for financial advice.


*1825 is a trading name for the Standard Life Aberdeen group’s advice business.

This article should not be taken as financial advice and the information here is based on our understanding in September 2019.

Pensions are investments. Their value can go down as well as up and they may be worth less than was paid in.