Investing holiday pay in 2026: smart or not?

Investing your holiday allowance

Leaving your holiday allowance (vakantiegeld) in a savings account feels safe. But with inflation at 2.8% (CPI, April 2026), your money loses value over time. That's why more and more people in the Netherlands are choosing to invest their holiday allowance. Not to get rich quick, but to get more out of their money in the long run.

Why more and more people in the Netherlands are investing their holiday allowance

For many people, holiday allowance feels like a bonus. It's not a fixed part of your monthly budget and it arrives in one lump sum, usually in May. That makes it easier to set aside without missing it in your day-to-day spending. Psychologically, that makes a big difference. Money that feels like a bonus is easier to invest than money that comes from your salary.

At the same time, more and more people are looking for alternatives to saving. At the end of 2025, over €528 billion was held in Dutch savings accounts, yet savings interest rates often lag behind inflation. If you leave your holiday allowance in a savings account, your purchasing power slowly declines. Investing offers the opportunity to counteract that — provided you're willing to take on risk and leave your money untouched for a longer period.

What can investing your holiday allowance deliver?

Suppose you invest €2,000 in holiday allowance each year. What happens after 5, 10 or 15 years? In 2026, instant-access savings rates typically range between 1.5 and 2.5 per cent. Global equity markets have historically delivered an average return of approximately 6 to 8 per cent per year over the long term. The table below shows the difference.

The calculation below is an indicative example based on average historical returns.

Historical average return. Returns can fluctuate significantly from year to year and offer no guarantee of future performance.

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After 15 years, investing leaves you with over €15,000 more than saving. Enough for a long trip, a sabbatical or a major renovation. But even after 5 years you can already see a difference, and the longer your time horizon, the greater the effect of compound interest.

Does this mean investing is always better?

No. The table shows an average scenario, but in reality investments fluctuate. In some years you make a 15% return, in other years you lose 20%. Only over the long term does this average out towards the historical mean. Saving gives certainty; investing gives the chance of more, but also the risk of less. Which choice suits you depends on your situation.

How do you start investing your holiday allowance?

You don't need to be a stock market expert. In fact, most beginners do well precisely by keeping it simple. Choose a strategy that suits you, set up an automatic contribution and let time do the work.

ETFs and index funds

Many people opt for ETFs or index funds because they automatically spread your investment across hundreds of companies. You don't have to choose what to invest in yourself, and you're not dependent on the success of a single share. There are platforms that arrange everything automatically based on your risk profile — ideal if you don't have the time or inclination to manage it continuously.

All at once or spread out?

Historically, investing a lump sum performs slightly better on average than drip-feeding, simply because your money is in the market for longer. But spreading your contributions feels calmer for many people, especially when markets are volatile. Not sure? You could, for example, invest 50% immediately and spread the rest over three to six months. That way you're partially invested straight away, while reducing the chance of putting everything in at exactly the wrong moment.

Pension investing as an option

Want to use your holiday allowance for later? Pension investing (pensioenbeleggen) could be worth considering. If you have annual allowance (jaarruimte) or carry-forward allowance (reserveringsruimte), you may be able to deduct your contribution in box 1. That delivers an immediate tax advantage. Bear in mind, however, that this money is in principle locked in until retirement and is therefore less flexible than regular investing or saving. Want to know how much you can contribute tax-efficiently? Calculate it with the annual allowance calculator (jaarruimte calculator).

What should you look out for?

Investing isn't for everyone and not for every goal. Before you start, it's worth getting a few things clear.

Who is investing holiday allowance suitable for?

For anyone who has a financial buffer, no significant debts and is willing to set money aside for at least five years. It doesn't matter whether you invest one thousand euros or ten thousand. Precisely by investing part of your holiday allowance each year, you build up wealth step by step. Don't have a buffer yet, or is your account overdrawn? Then saving or paying off debt is the wiser choice.

Common mistakes

Only invest money you can afford to miss. Don't go in expecting to make a significant return within a year — in the short term, investments can fluctuate considerably. And don't let emotions guide you. It's precisely by staying calm and maintaining a long time horizon that you increase the chance of a good result. Selling in a panic during a dip is one of the most expensive mistakes you can make.

If you're not investing for your pension but for a specific goal such as a sabbatical, study or home purchase, goal-based investing (doelbeleggen) may be a better fit. See how it works and what time horizon applies.