Tax-friendly 'levensloop' draws record deposit in Netherlands

NETHERLANDS - The discussions about the rise of the retirement age might have triggered a record amount deposited in tax-friendly 'levensloop', or 'life course' accounts, Statistics Netherlands (CBS) has suggested.

It found that workers paid €908m into their levensloop last year, taking the combined savings to almost €3.3bn.

The CBS added that deposits were up by 10% compared with 2008, although employees took out €164m last year, 35% more than in the previous year.

The levensloop was introduced in 2006, to encourage people to finance parental leave, as well as leave for sabbatical, education and care.

Although its main aim was to discourage people from taking early retirement, the levensloop still allows its deposits to be used for that very purpose.

Last year, the cabinet - now outgoing - decided to raise the retirement age for the state pension AOW from 65 to 67 within 15 years, indicating that it would change the fiscal treatment of second-pillar pensions in a similar way.

The social partners of employers and employees, however, have agreed to a flexible retirement age of 66 in 2020 and to consider a further rise as of 2015.

The retirement age is likely to be part of discussions between the political parties that will take part in a new coalition government.

The new government is also expected to change the present set-up of the levensloop and another tax-friendly saving scheme, the 'spaarloon'.