The Netherlands sees largest rise in purchasing power since 2001

Based on the newest figures from Statistics Netherlands (CBS), purchasing power in the Netherlands has seen the largest increase in over 20 years, rising by 3,6 percent in 2024. Not everyone benefited equally, with employees seeing greater gains than residents who receive welfare benefits.

Wage increases in the Netherlands drive rise in purchasing power

In 2024, the average purchasing power in the Netherlands rose by 3,6 percent, the largest increase measured since 2021 when the country saw a 6,3 percent rise. The biggest driver behind the most recent rise is the 6,8 percent increase in collective labour agreement wages - the largest of its kind in over 40 years.

According to CBS, different groups saw different levels of purchasing power growth based on their main source of household income. This means that half of the Netherlands’ population saw a rise in purchasing power equal to or greater than the average, while the other half saw a lower increase.

Dutch workers see largest rise in purchasing power

Significant wage increases mean that employees saw the greatest rise in purchasing power at an average of 5,3 percent. Inflation of 3,1 percent brought the real wage increase down to 3,7 percent, but workers also benefited from the renewed increase in labour tax credit. 

Several workers also added to their purchasing power by working longer hours or changing jobs for a higher income. On the other hand, 25 percent of employees saw a drop in purchasing power due to job loss or a reduction in working hours. 

Additionally, self-employed workers had an average purchasing power increase of 3,1 percent - lower than that of other employees. This is mainly due to the reduction of both the SME profit exemption and the self-employment tax deduction.

Lower purchasing power for households receiving benefits 

Households in the Netherlands that receive social assistance benefits saw a much lower rise in purchasing power than in previous years, at just 0,2 percent compared to 2,3 percent in 2023. The loss of the energy allowance (around 1.300 euros) is one of the main reasons.

Increases in minimum wage, associated benefits and allowances, and pension, together with the expansion of housing allowances and child benefits, are the only reason there wasn’t a decrease in purchasing power. Pensioners saw a 1,8 percent increase in purchasing power last year, the first rise after a three-year decline, thanks to a higher state pension (AOW). 

Child benefit hikes meant two-parent households received more, with their incomes improving more than those of single-parent households and couples without children. Family households had an improved purchasing power of 5,6 percent, compared to 4,8 percent for single-parent households, 2,6 percent for couples without children and 2 percent for single households.