Dutch households more financially resilient despite inflation, ABN Amro finds

Dutch households are more financially resilient than eight years ago, ABN Amro analysis shows. Rising incomes have outpaced living costs, allowing most to retain more earnings for unexpected expenses.

“Since 2017, financial security has increased,” Sandra Phlippen, ABN Amro’s chief economist, told AD. Households now spend less of their income on fixed costs like rent, energy, and health insurance, leaving more disposable income.

Phlippen was surprised by the findings, which contrast public perception shaped by persistent inflation headlines. The study analyzed anonymized data from 340,000 households. Despite higher fixed costs from the energy crisis triggered by Russia’s invasion of Ukraine, incomes for benefit recipients, pensioners, and salaried workers increased even more.

Phlippen attributes the gap between perception and reality to the “sticker effect”: visible price hikes in supermarkets overshadow rising salaries, which are less obvious day-to-day. Supermarket and hospitality expenses aren’t counted as fixed costs, but higher incomes have reportedly compensated for these rising prices.

Government intervention during the energy crisis was crucial. Benefit recipients’ incomes rose faster than salaried workers’, aided by energy cost compensations, rebates, and price caps in 2022-2023. The minimum wage also increased sharply in 2023, supporting lower-income households in managing costs.

Phlippen praised the government’s swift action for protecting vulnerable groups. Salaried workers saw wage growth later due to labor agreements but had higher income increases by 2024.

In 2024, salaried workers spent the smallest share on fixed costs (41 percent), compared to pensioners (47 percent) and benefit recipients (53 percent). Among benefit recipients, many still face financial strain; the top 10 percent with highest fixed costs have just 515 euros left monthly, making daily budgets tight.

The Dutch Institute for Budget Information (Nibud) warns spending over 60 percent of income on fixed costs signals financial fragility. ABN Amro found one in four benefit recipients exceed this limit.