Netherlands residents have biggest financial buffers in EU

On average, Netherlands residents have a financial buffer of 152,520 euros - the highest amount in the European Union, according to a study by credit insurer Allianz Trade. The Netherlands also tops the list for the highest amount added to these nest eggs per year in the past two decades (+€3,590).

Allianz Trade studied the extra money set aside by residents in the nine “most important EU countries,” looking at savings, investments, and pensions. According to researcher Johan Geeroms, the Netherlands’ leading position in the past 20 years is mainly due to its strong pension system. In the past ten years, pension funds had to make cuts and the Netherlands’ position clearly declined. “The inflation of recent years has also hit the Dutch people’s nest egg more than average,” he said.

The researchers noted two main ways for financial buffers to grow. The first is income through interest, dividends, or appreciation of securities - something the Netherlands and Finland are champions at, according to Geeroms. The second is pushing new money into savings accounts, as people in Germany and Austria tend to do, according to Allianz Trade.

“Investing yields much more in the longer term, but you also have to deal with more violent fluctuations,” Geeroms said. Because Netherlands residents have so much of their money in investments, the stock market downturn prompted by Russia’s invasion of Ukraine in 2022 hit them hard. “If you also get hit with 10% inflation, things go quickly in the wrong direction.”

According to Geeroms, the real return - the nominal value of money built up minus inflation - in the Netherlands in 2022 was -24.7 percent. “That was the largest loss of value within the EU that year,” he said. “That volatility is a logical consequence of the stock exchange where assets are parked.” You have bigger chances of good years, but also bad years.

“Over the long term, the Dutch and Fins have made so much more than traditional savers such as Germany and Austria,” Geeroms said. “I see no reason that this will be different in the future.”