Research shows that most people have build up too little pension

Too little pension??

Last weekend I have read an article that stated that in The Netherland almost one in three!!! employees build up less than 70% of their gross income as a pension. And also more than 40% of the self-employed will have a pension shortfall. This is shown by recent research and this really shocked me!




After my initial shock, I did some basic research by myself. I spoke to some colleagues about their pension. And the official research was right, most of them didn’t know much about their pension and what the payout will be when they retire. Of course the quality of pension schemes also plays a role here because they all have their pension in one of the world largest pension fund (National Civil Pension Fund – ABP).

After my own research I’m convinced that people should educate themselves more about their pension. You can’t wait and sit back and relax. Grow insight, and take action!


The best time to invest was 20 years ago, the second best is now



Dutch Pension system

The Dutch Pension System consists of three pillars. A state pension (AOW), A supplementary collective (company) pensions and the private individual pension products that each person can arrange for himself. Together these three pillars determine the amount of pension that a person will receive when he retires at the end of his working life. For more information, just read my post on the Dutch Pension System.

Research showed that most employees do not know that they are building up too little pension in their collective pension (Pillar 2). Whether one has a high or low income appears to be of no importance. A too low pension build up occurs in all income categories, household composition and housing situations (Source: RaboResearch in cooperation with budget institute Nibud).

It can’t be said too much how important it is to understand your collective (company) pension – Pillar 2 – and what affects your pension (e.g. Divorce, unemployment, etc).


Take action in your own hands

After reading the article and talking to my colleagues, I firmly believe that people should take action. First of all they have to dive into the numbers and really understand their pension fund. After gaining insight an analysis can be made about their total pension plan (all pillars together). And after this if you (still) think you will receive too little pension when you retire, you can take action. The sooner the better!

This is also what the researchers wrote. They stated that for most people it is wise to build up additional capital themselves by saving or investing.


Think of your pension and start saving/investing


My personal pension situation

Pillar I: When I reach the age 69 and 6 months I will receive my AOW (state pension).

Pillar II: I’m working for a local government and therefore I’m a participant of the largest pension fund in The Netherlands (ABP). ABP is the pension fund for the civil service and teachers. The ABP has invested capital of almost 390 Billion. If I continue working and paying my pension fees I’ll build up approx. 70% of my gross income.

Pillar III: I have almost zero to none options for tax advantaged individual pension products. That is why I started my own pension fund: Vrijheid Fonds.



I was shocked when I first read the research. I couldn’t believe that so many people will have too little pension. The talk I had with colleagues also opened my eyes. Here in The Netherlands there is still a lot of ground to win by educating people about pensions. And I hope I can contribute my small part by keeping my website alive and publish about this subject.

How does your pension situation looks like?

I like to hear from you?



One thought on “Research shows that most people have build up too little pension

  1. BescheidenBeurs

    Just like you I live in the Netherlands. I will receive state pension AOW when I am approx. 69 years old. Furthermore I will receive 5 company pensions starting at different ages, because I had a lot of different jobs over the years. I also have a personal pension with Brand New Day where I maximize my tax benefits each year. Then I have my investments and our house will be mortgagefree when I am 57 years old.

    As you can imagine I do not worry about the fincial aspects of my retirement 😉

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