House prices drive up pensioners’ assets

Within three years Dutch pensioners will on average be richer than the younger generations, according to a social affairs ministry report. The report says soaring house prices are the biggest reason for the growth in wealth among the over-65s.

The timing of the report is significant because of calls to make wealthier pensioners pay more towards the cost of the state pension AOW. Both the PvdA (Labour) and ChristenUnie – who are currently involved in cabinet formation talks – back an extra premium for richer pensioners. The Christian Democrats – the biggest party in the tentative coalition – are opposed.
Between now and 2030, the spending power of pensioners will rise by 25% to an average €52.800 a year, the report estimates. Other reasons for the rise are better levels of education, which led to better-paid jobs, and a slow-down in early retirement.
The boom in the number of working women is also very significant, the report says. While men’s pensions are nowadays around three times as high as womens’, women will soon catch up considerably. This is one reason why the number of households with corporate pensions of more than €20,000 a year is set to rise from 13% to 37%.
But the number of (largely foreign) pensioners who are not entitled to a full state pension (because they do not reach the 50-year residency qualification) will rise from 170,000 now to 600,000 by 2020. Of them, around 55,000 will be eligible for extra welfare payments.

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