Part-time workers forget to think about pension when deciding to work less

People who work part-time often don’t think about the consequences working less will have on their pensions. Seven out of ten people who decided to work less did not find out what that would mean for their retirement, according to a study by the Wijzer in Geldzaken platform of the Ministry of Finance. The researchers spoke of a chronic lack of attention, NOS reports.

For the study, I&O Research surveyed over 1,500 Dutch people aged 30 to 67 who work more than 12 hours a week. Nearly half of the Dutch working population, 45 percent, work part-time.

“The focus is often on being able to make ends meet ‘now,’ instead of making ends meet after retirement,” Christiaan Mijer of Wijzer in Geldzaken, which translates to “Money Wise,” told the broadcaster.

Lisa Brüggen, a pension expert from Netspar, gave an example: “If you, as a construction employee, decide to work one day less per week at the age of 32, you will accrue approximately 27,000 euros less in pension. In concrete terms, that means that you have approximately 120 euros less net to spend per month after your retirement. That could be the difference between being able to make ends meet and not.”

This is particularly a problem for women in the Netherlands. Nearly two-thirds of working women work part-time, compared to 28 percent of men. As a result, women build up much less pension. The Netherlands has the largest pension gap between men and women after Cyprus, at a difference of over 40 percent.

“Many people don’t realize enough that the choices made have financial consequences for later,” said Brüggen. “We know from research that a large number of women say they are not financially independent and do not know how they are doing financially outside of the monthly household budget, and certainly not in old age.”

Couples rarely talk about the details of their pensions, the researchers found. Nine out of ten couples without an official partnership have not arranged anything regarding finances and pensions in case their relationship ends. Three-quarters said they’d figure it out if they broke up. However, according to Wijzer in Geldzaken, many pension disputes concern the division of pension between splitting partners.

Wijzer in Geldzaken stressed that now is when you still have influence over your pension assets, so make sure you will also have sufficient income after reaching retirement age.