Netherlands purchasing power rises in 2025 amid uneven gains

In 2025, the average purchasing power in the Netherlands increased by 1.2 percent, according to preliminary data from CBS. This growth was primarily driven by wage developments, with collective labor agreement wages rising by 5.0 percent against an inflation rate of 3.3 percent. Employees in households saw an average increase of 2.2 percent in purchasing power.

However, the benefits were not uniform. Self-employed individuals saw a negligible average increase of 0.1 percent, impacted by reductions in the self-employed deduction and SME profit exemption. Retirees also faced challenges; while those on social assistance saw a 1.3 percent increase due to minimum wage links, those with significant supplementary pensions saw little gain or even a decline. In the highest income group of retirees, purchasing power fell by 1.2 percent.

Looking toward 2027, the outlook appears less favorable. While the government projects a 0.3 percent purchasing power increase for pensioners, the seniors' organization ANBO-PCOB warns that an individual with a 30,000 euro gross pension income could see a 0.5 percent decrease in purchasing power. This discrepancy is attributed to rising inflation, increased tax rates in the first bracket, and a reduction in the elderly tax credit.