What is a pension?

A pension is the income you receive when you reach a certain age or stop working. In the Netherlands, you can build up a pension with the Dutch government, your employer and financial institutions. It often consists of three parts, and sometimes four parts.

1. Part one is your AOW. This is the basic state pension you receive from your AOW pension age.

2. Part two is a payment from a pension fund. You only have this if you have worked for employers with a pension scheme.

3. Part three is self-built pension: Think of savings or an annuity.

4. Part four, the final part, consists of personal investments, such as shares, your home, your own business, and so on.