Dutch Purchasing Power Records Biggest Growth Since 2001
According to new figures released by Statistics Netherlands (CBS), purchasing power in the Netherlands rose significantly in 2024, marking the largest increase since 2001. On average, Dutch residents experienced a 3.6 percent improvement in their purchasing power compared to the previous year. This sharp rise can largely be attributed to wages negotiated under collective labour agreements, which increased by 6.8 percent — the biggest contractual wage rise in more than four decades.
Despite this overall positive development, the growth was not evenly distributed across different groups in society. Employees in particular benefited the most. Their purchasing power rose by an average of 5.3 percent, after accounting for inflation of 3.1 percent, which means workers saw their real wages increase by around 3.7 percent. The rise in the labour tax credit also contributed to these gains. Many employees managed to improve their financial situation even further by switching to better-paid positions or by working more hours. Nevertheless, not everyone shared in these benefits: around one in four employees still experienced a loss in purchasing power, often because of job loss or reduced working hours.
For the self-employed, the situation was less favorable. On average, their purchasing power increased by only 3.1 percent. The modest rise was partly due to changes in tax regulations, including cuts to various deductions such as the self-employment allowance and the SME profit exemption. These reductions in tax benefits limited the positive effects of higher earnings for freelancers and business owners.
Those dependent on social benefits experienced the weakest growth. Their purchasing power rose by just 0.2 percent. A major reason for this stagnation was the removal of the government’s one-off energy allowance, which in the previous year had provided households with an average of 1,300 euros in relief. However, certain measures helped to soften the impact for this group. Increases in the minimum wage, pensions, allowances, and child-related benefits ensured that their standard of living did not deteriorate further. Pensioners, who had endured three consecutive years of decline, finally saw an improvement in their financial situation, with their purchasing power increasing by 1.8 percent in 2024.
Families with children were among those who saw the most significant improvements. Two-parent households, for example, registered an average gain of 5.6 percent. Single-parent households and families without children also saw increases, though to a lesser degree, averaging around 2 percent. These differences highlight how family composition and income sources played an important role in determining how much households were able to benefit from the general rise in wages.
In summary, while 2024 brought the largest overall rise in purchasing power in more than 20 years, the extent of the improvement varied greatly across society. Employees, especially those with children, were the clear winners, while benefit recipients and the self-employed saw only limited gains. The figures underline both the strength of wage growth in the Netherlands and the uneven distribution of its benefits.
