"Once it goes up, the state pension can’t come down again"

Published on: 24 December 2024

The Netherlands will have as many as 5.4 million people over 65 in the year 2070, compared to 3.7 million today. The 2024-2070 population forecast from the Central Bureau of Statistics (CBS) also shows that life expectancy in the short term will be slightly lower than previously assumed. This is partly due to the Covid pandemic.

 

CBS writes that during the Covid pandemic, life expectancy fell. In 2020 and 2021, life expectancy for men and women combined fell to 81.4 years. That is 0.7 years lower than in 2019. In 2022, life expectancy increased to 81.6 and in 2023 to 81.8 years.

 

Based on preliminary figures through September 2024, life expectancy is increasing for men in the Netherlands compared to 2023, but decreasing slightly for women. The expected recovery is lagging behind, according to CBS. Other countries in Europe show more recovery.

 

After-effect of Covid
According to actuary Caroline Bruls of APG, Covid has clearly had an impact on the mortality rate in our country, and it has an after-effect on the life expectancy of Dutch people. “That is now rising a little slower than we previously thought. But I think - as does CBS - that the long-term life expectancy figures are not really affected by it. We see that effects of temporary other circumstances eventually disappear as well.”

 

What may start to influence life expectancy in a positive sense, Bruls says, are new treatment methods for diseases, new drugs and wider availability of technology. “It is difficult to predict how these will affect the life expectancy of Dutch people. At the same time, new diseases may emerge. No one had foreseen the Covid pandemic either.”

 

Impact of life expectancy on increase in state pension age 
The life expectancy of Dutch people is an important indicator of whether or not to raise the state pension age. Bruls: “If we all live longer, you get a larger group of seniors. Every year the government looks at what life expectancy will be in five years and then sets the age of eligibility for the state pension. The more seniors you have relative to young people, the more expensive the state pension becomes. Those who pay taxes now directly fund the state pension benefits of seniors.”

 

In 2013, the age of eligibility for the state pension age went beyond 65 for the first time. The effective date of the government's basic pension went to 65 years and one month at that time. Today, the official retirement age is 67. And it is certain that the state pension age will continue to rise.

 

In 2023, the Dutch government determined that the state pension age should reach 67 years and three months in 2028. In 2029 and 2030, the state pension age will not rise further. Next year, the government will decide whether the state pension will remain at the same level in 2031 or will have to be raised again. The government will also look at life expectancy.

 

Not down
Bruls tells us that the eligibility age for the state pension will not go down if the life expectancy of Dutch people were to suddenly drop (sharply). “That is actually quite remarkable.

 

The extent to which the rise in life expectancy affects the rise in the state pension age is laid down by law. But once it goes up, the state pension age cannot go down unless the law is amended.”