How much are you allowed to invest for your pension

Pension investing with tax benefits sounds attractive, but how much are you actually allowed to contribute? The government sets clear limits on tax-friendly pension investing via your annual allowance (jaarruimte) and catch-up allowance (reserveringsruimte). The statutory maximum for the annual allowance is €35,798 and for the catch-up allowance is €42,108 in 2025, but how much you personally can contribute strongly depends on your situation. An entrepreneur without pension accrual can utilise the full allowance, while an employee with a good pension scheme may only have a few hundred euros. We explain exactly how much you are allowed to invest for your pension and how to calculate this.

How much can you invest for your pension via the annual allowance

The annual allowance (jaarruimte) is the maximum amount you are allowed to contribute tax-friendly for a pension in a calendar year via an annuity, bank savings, or investment account. The statutory maximum for 2025 is €35,798, but this does not mean everyone has that much annual allowance. Your personal annual allowance is calculated using the formula: Annual Allowance = 30% × (Premium Basis) - 6.27 × (Factor A). 

The premium basis (premiegrondslag) is calculated based on your income from the previous year, reduced by the AOW-franchise (State Pension non-accrual threshold) applicable at that time. Factor A is the pension accrual you have built up with your employer and is stated on your Uniform Pension Statement (UPO). For self-employed individuals (zzp'ers) without a pension scheme, Factor A is zero, which is why they usually have much more annual allowance than employees with a comprehensive pension scheme.

‍

How much can I invest for my pension using the catch-up allowance

In addition to your annual allowance, you may also use your catch-up allowance (reserveringsruimte), also known as catch-up room (inhaalruimte). This is the unused annual allowance from previous years that you can still contribute. Since the legislative amendment in 2023, you are allowed to go back up to 10 years (previously 7 years) to utilise missed annual allowance. The statutory maximum for the catch-up allowance is €42,108 in 2025, but here too your personal allowance depends on how much annual allowance you did not use in the past. If, for example, you had an annual allowance of €10,000 for the past five years but did not contribute anything, your catch-up allowance is €50,000, of which you may use a maximum of €42,108 in 2025.

‍

Practical example of your maximum contribution

Let's make concrete how much you are allowed to invest for your pension with two examples. 

Example 1: a self-employed person (zzp'er) with a gross income of €60,000 without pension accrual (Factor A = 0). The premium basis (premiegrondslag) becomes: €60,000 minus €18,475 (AOW-franchise) = €41,525. Of this, you may use 30%: €12,458 in annual allowance. 

Example 2: an employee with the same income but with a Factor A of 1,500 (good pension scheme). The calculation becomes: (€41,525 × 30%) - (6.27 × €1,500) = €12,458 - €9,405 = €3,053 in annual allowance. This difference of almost €10,000 shows how much influence your pension accrual via work has on how much you are allowed to invest for your pension.

‍

What happens if you contribute too much

It is crucial to stay within your personal annual allowance plus catch-up allowance. If you contribute more than your tax allowance permits, the excess is not deductible and you will not receive any tax benefit. The money remains locked in your blocked pension account until your AOW (State Pension) age, without you having any tax advantage from it. Therefore, it is essential to calculate exactly how much you are allowed to invest for your pension beforehand. The Tax Authority (Belastingdienst) has a calculation tool for this, but banks and insurers such as Vive also automatically calculate this for you based on your personal data.

‍

Recent improvements for pension investing

Since 1 January 2023, the possibilities for pension investing have significantly improved. The annual allowance (jaarruimte) has been increased to 30% of your premium basis, whereas it was lower before. You are also now allowed to catch up on your unused annual allowance over the past 10 years instead of 7 years. The statutory maximums are the same for everyone (€35,798 for annual allowance and €42,108 for catch-up allowance), but your personal allowance is entirely dependent on your income, pension accrual, and history. These improvements mean that entrepreneurs and people without a full pension scheme, in particular, have more scope to build up a tax-advantageous pension.

‍

Start pension investing within your allowance

How much you are allowed to invest for your pension is therefore entirely personal and depends on your gross income, AOW-franchise, Factor A, and unused allowance from the past. Entrepreneurs without a pension scheme can often utilise the full statutory maximums, while employees with a good scheme sometimes only have limited allowance. At Vive, you can easily calculate your annual allowance with our calculator and also find out your catch-up allowance in a few steps. This way, you can make optimal use of your tax allowance without the risk of contributing too much.

‍