In the Netherlands, retirement income is usually described as three pillars:
This initially puzzled me, because the second pillar does not always feel like a personal investment account. In many traditional Dutch pension schemes you do not simply get back the money you paid in. You build a right to pension income later. Under newer pension rules this is moving more toward contribution-based pots, but the basic idea remains: you are building retirement income, not just a normal brokerage account.
Attention! The values on this page have been updated to 2026. Pension rules depend heavily on your employer, pension fund, age and migration history, so always check your own pension portal, SVB and Belastingdienst before making decisions.
The Dutch government provides the AOW pension. According to SVB , if you have always lived or worked in the Netherlands, you normally build up a full AOW pension. If you lived or worked abroad, you normally build up less.
The rule of thumb is simple: every insured year counts for 2% of the full AOW. You need 50 insured years for the full amount. You can check your own AOW build-up in My SVB . You may also be able to build up AOW from abroad with voluntary AOW insurance , but the rules and deadlines matter.
SVB updates AOW amounts twice a year. From 1 July 2026, the full AOW for someone living alone in the Netherlands is 1.662,16€ gross per month, plus 104,78€ gross holiday allowance built up monthly. For someone married or living together, the full AOW is 1.139,39€ gross per month per person, plus 74,85€ gross holiday allowance built up monthly. The net amount depends on tax credits and deductions.
If you move to the Netherlands when you are 40 and retire around 67, you may build around 27 insured years. That is about 54% of a full AOW, not 100%. That is why expats often need to pay special attention to employer pension and private pension saving.
With AOW alone, retirement income can be quite limited. That is where employer pension and private pension saving come in.
Many employees in the Netherlands build pension through their employer. Sometimes it is a company scheme, sometimes it is a sector pension fund. The exact contribution, employee share, employer share and pension accrual depend on the scheme.
The important concept is the franchise. This is the part of your salary over which you do not build employer pension because the system assumes that AOW will cover that first part. The salary above the franchise is your pension base, often called pensioengrondslag.
As an example, PME gives these 2026 figures for the Metalektro basic scheme:
So, if your gross pensionable salary is 50.000€, PME calculates:
This is only one example. Your employer may use another pension fund, another contribution rate, or another new-pension-rule arrangement. Always check your Uniform Pension Overview (UPO) or pension portal.
Private pension saving is the third pillar. In Dutch you will often see terms like lijfrente, lijfrenterekening, lijfrentebeleggingsrecht, pensioenrekening or pensioenbeleggen. The basic idea is that you set money aside in a blocked pension product. You may deduct the contribution from your Box 1 income now, and later you pay tax when the pension income is paid out.
This is not the same as a normal investment account. In a normal account you keep flexibility, but the money belongs in Box 3. In a qualifying private pension account, the money is locked for retirement and usually not counted as Box 3 wealth, but you must follow the tax rules.
The magic word is jaarruimte. You only get a tax deduction if you have a pension shortfall. Belastingdienst calls the available deduction room your jaarruimte. For 2026, your jaarruimte depends on your 2025 situation.
Belastingdienst says your jaarruimte and reserveringsruimte determine the maximum amount you can deduct. If you had unused jaarruimte from 2016 through 2025, you may be able to use it in 2026 as reserveringsruimte. The maximum reserveringsruimte in 2026 is 42.753€.
For many employees with an older-style pension scheme, the simplified 2026 formula is:
jaarruimte = 30% x premium base - 6,27 x factor A
Where:
This is a place where I strongly recommend using Belastingdienst’s Hulpmiddel Lijfrentepremie vanaf 2016 , because the calculation depends on your previous year income, your UPO and any unused room from earlier years.
Imagine your 2025 income was 60.000€ and you had no employer pension build-up, so your factor A is 0€.
premium base = 60.000€ - 19.172€ = 40.828€ jaarruimte = 30% x 40.828€ = 12.248€
That would mean you could potentially deduct up to 12.248€ of qualifying private pension contributions in 2026, assuming no other corrections apply.
Now imagine the same 60.000€ income, but your UPO shows factor A of 1.500€.
premium base = 60.000€ - 19.172€ = 40.828€ base room = 30% x 40.828€ = 12.248€ pension correction = 6,27 x 1.500€ = 9.405€ jaarruimte = 12.248€ - 9.405€ = 2.843€
In this example, your employer pension already filled most of the gap, but you still have some room for deductible private pension saving.
You moved to the Netherlands at 40, you earn 60.000€ gross per year, and your employer pension uses the PME 2026 basic scheme. The simplified calculation would be:
This is deliberately simplified. During 27 years your salary, pension rules, tax rules, AOW age and inflation will change. If you have the 30% ruling, your pensionable salary may also be lower depending on how your employer applies the scheme. Check your payslip and UPO.
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