The large amounts of pension savings across the Dutch working population significantly reduce inequality, the country’s statistics agency CBS has found.

If pension assets were to be included in total household assets, the share of the total wealth of the richest 10% of households would fall from 62% to 48%, according to CBS calculations.

Similarly, the so-called Gini co-efficient, an international measure for inequality, for the Netherlands would fall from 0.77 to 0.65 if pension assets were to be included in the calculations.

In official statistics, pension assets are not included in household wealth as those entitled to pension assets cannot freely dispose of this money, and because pension pots cannot be inherited.

Unsurprisingly, including pension assets in household wealth reduces inequality the most for households where the main breadwinner is aged between 55 and 65.

In this age group, pension assets account for half of a household’s total assets. Total pension assets in the Netherlands amounted to roughly €1.6bn in Q2 2020 according to DNB figures. This equals some €195,000 in pension assets per household.

“Many households with few or no assets at all do have pension assets,” CBS noted, with an important reason for this being that most Dutch workers, including those on low salaries, are obligated to save for their pension.

“For higher-income households, assets also rise when pension assets are included in their total wealth of course. But the relative difference in wealth between low-income households and high-income households is being reduced,” CBS stated.

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