Recently passed AOW act will reduce the number of AOW recipients by half a million in 2025

18/07/2012 15:00

The projected number of over-65s will exceed 3.8 million in 2025. If no action is taken, the number of people entitled to the state old age pension (AOW) in the Netherlands would grow by 1.1 million relative to 1 January 2012. The bill passed by the Dutch Upper Chamber on 10 July will reduce the number of AOW benefits by more than half a million. 

Increase AOW recipients in the Netherlands reduced by 50 percent

As a result of the passing of the bill, the age at which people are entitled to AOW will gradually be raised from 65 in 2012 to 67 in 2023. Subsequently, the AOW age will be raised at the same rate as life expectancy of 65-year-olds, by 3 months at a time. The age limit for AOW entitlement will be 67 years and 6 months in 2025 on the basis of the population forecast conducted by Statistics Netherlands. The bill passed on 10 July will result in a reduction of AOW benefits in the Netherlands by more than half a million (50 percent) in 2025. 

Today, some 10 percent of people entitled to AOW are living abroad and this category will also be affected by the consequences of the higher AOW age limit.

Forecast number of AOW recipients in the Netherlands until the year 2025

The projected number of over-65s will exceed 3.8 million in 2025. If no action is taken, the number of people entitled to the state old age pension (AOW) in the Netherlands would grow by 1.1 million relative to 1 January 2012. The bill passed by the Dutch Upper Chamber on 10 July will reduce the number of AOW benefits by more than half a million.

Also lower than pension agreement

In the bill passed on 10 July 2012, the AOW age limit is reached sooner than in the agreement reached in June 2011 between the social partners and the then government. In the pension agreement, the AOW entitlement age limit is raised later and in larger steps.

In all years, the number of people living in the Netherlands who are entitled to AOW is lower in the recently passed bill than in the pension agreement. The reduction is projected to exceed 100 thousand in 2025.

Brugt Kazemier and Coen van Duin