NETHERLANDS - The new tax-friendly bank saving scheme for a pension is proving to be very popular among Dutch households.
The total balance of 'banksparen' for retirement has doubled to more than €4.7bn during 2010, according to Statistics Netherlands (CBS).
Bank saving for retirement was introduced in 2008 to allow banks to compete with the pension products of insurers, which drew criticism for hidden and often high costs.
Bank savers are exempt from paying tax over their accrued pension capital, which is held in a frozen bank account.
A spokesman for the Dutch Banking Association (NVB), which has lobbied for the legal proposal, said it was not surprised by the popularity of bank saving.
"Our saving product is customer-friendly and transparent, and does not have hidden costs," he said.
Until 2008, tax-free saving in the Netherlands was only possible through annuity insurance.
The Netherlands has two other tax-friendly schemes: 'spaarloon' and 'levensloop' or life course scheme.
The long-running spaarloon allows employees to save a maximum of €613 a year tax-free, which they can spend as they choose after four years.
The levensloop - introduced in 2006 - allows workers to save 12% of their salary on a tax-efficient basis to help cover the cost of temporary leave, such as study, parental and care leave.
Although the product was designed to discourage early retirement, it still allows deposits to be used for that purpose.
Until 2009, the take-up of the levensloop was disappointing, stabilising at approximately 10% of workforce.
However, talks over the rise of the retirement age triggered a record amount of €908m being deposited in life course accounts in 2009, taking the combined savings to almost €3.3bn.
The government is expected to change the present set-up of spaarloon and levensloop by merging the two schemes.