Savings and pensions in The Netherlands

Abstract

We describe the distribution of private wealth of Dutch households over the life cycle and relate this to the size of individual entitlements to pay-as-you-go social security benefits and funded pension benefits. We also investigate saving motives and find that saving for old age plays only a minor role. Precautionary motives play some role, but in view of the very extensive social safety net it does not seem likely that precaution is an important factor in saving decisions. Altogether, the data are consistent with the view that an extensive social safety net and generous old age income provisions reduce the need to accumulate private wealth.