Almost all Netherlands households will have more purchasing power this year: Nibud

Almost all households in the Netherlands will have more to spend this year. However, single people with a low income will see their purchasing power deteriorate by between 65 and 75 euros per month due to the disappearance of the energy allowance, the National Institute for Budget Information (Nibud) calculated.

The fact that most people will have more purchasing power has to do with the wage increases in many collective bargaining agreements. Working people will also notice that tax credits have increased. That leaves more net of their gross wages. The purchasing power calculations from Nibud show a diverse picture. Sometimes, it only concerns a few euros of improvement in purchasing power, but there are also peaks of around 300 euros per month.

“If you work and have children, your purchasing power increases the most,” explained Nibud director Arjan Vliegenhart. These households benefit from the child benefit increasing by a few dozen euros. The changes in the child-related budget also play a role. The amounts of this benefit have been significantly increased.

However, the Dutch should not count themselves rich based on these purchasing power calculations, Vliegenhart warned. “We are still climbing out of the 2022 hole,” he said. In that year, when Russia invaded Ukraine, and energy prices spiked, there was a broad loss of purchasing power.

“Energy prices have now fallen again, but other products have certainly not become cheaper,” said the Nibud director. “We are catching our breath again, but for many people, it remains uncertain financially. The increases in benefits and the minimum wage do not guarantee an acceptable minimum subsistence for everyone.” He called on the parties currently involved in the Cabinet formation talks to “include all conditions of social security in the necessary measures.”

Nibud did not take specific circumstances into account in its calculations. That concerns, for example, someone’s travel expenses or the use of childcare. The institute warned that, in practice, many more variables play a role in your purchasing power. Things like a promotion at work, becoming unemployed, expanding your family, or moving can all have an impact.