Dutch household spending power fell 1% in 2012, the biggest drop recorded since 1985, the national statistics office CBS said on Tuesday.

Spending power is likely to fall again this year and in 2014 in the light of tax increases and further government spending cuts. The family spending institute Nibud said in January families are likely to have 2% less in their pockets this year.

The government’s macro-economic think tank CPB, which uses a different way of calculating spending power movements, expects a 1.25% drop this year, on top of a 2.5% reduction in 2012.

Pensions

Economists too say households will have less to spend, website nu.nl reported. They point to cuts in corporate pensions this year as having a significant impact on retired people.

2013 is set to be the fourth year in a row that spending power has declined. It fell 0.5% in 2010 and 0.8% in 2011 as wage rises were limited and the government tried to get the economy under control.

The government will publish the latest spending power forecasts, divided in household type, along with the budget on September 17.

Nevertheless, the CBS also said on Tuesday the mood among Dutch consumers improved in August. The consumer confidence index rose by five points to -33 in August.

But while consumers were less negative about the economic climate, they were still unwilling to spend money on major purchases, the CBS said.