Payout pension investments earlier

What is and isn't possible?

Can you withdraw from your pension investments early if you need the money? This is a question we often receive from entrepreneurs and employees who are building up a pension but are concerned about the accessibility of their money. The honest answer: withdrawing pension investments early without fiscal consequences is virtually impossible. Your pension capital is blocked until around your State Pension Age (AOW-age). Depending on the product, the payout may only start from your State Pension Age, sometimes a maximum of five years before. However, there are possibilities that many people are unaware of. We explain when you *can* withdraw, what the consequences are of early withdrawal, and why these rules ultimately help you build up more pension.

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Withdrawing pension investments early will cost you thousands of euros

The hard truth about withdrawing pension investments early: it is technically allowed, but it is financially disastrous. If you withdraw your pension investments early, you not only pay income tax on the full amount, but also a penalty in the form of revision interest of up to a maximum of 20%. For a pension pot of €50,000, this could mean, for example, that you pay €25,000 in tax and penalties, depending on your tax bracket. You are then left with only half of the money you have built up over the years. These rules apply to everyone: self-employed persons (zzp'ers), employees, and directors/major shareholders (DGA's). The government aims to prevent people from misusing the tax benefit by temporarily putting money into a pension and then withdrawing it again.

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When you can withdraw pension investments without a penalty

Fortunately, you do not always have to wait until your exact State Pension Age to have your pension paid out. For many modern annuities (*lijfrentes*), withdrawal is possible from the calendar year in which you reach your State Pension Age (AOW-age). With some products, you can start payments up to five years before your State Pension Age, but this is product-dependent. You must start your pension payout no later than in the calendar year that ends five years after the year in which you receive your State Pension. The payout is not done in a lump sum but through monthly amounts, comparable to a salary. This can be for a fixed period or for life, depending on the payment product you choose. At Vive, we help you to utilise your money as effectively as possible.

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Small pension pots can be withdrawn in one go

There is one exception where you are allowed to have your pension paid out earlier in one go: if your pension pot is small. This is officially called 'small annuity buy-out' (*afkoop kleine lijfrente*), and for 2025, a limit of €5,429 for the buy-out amount applies. If your total pension capital remains below this amount, you may withdraw the full amount in one go. You will still pay income tax on this, but no revision interest. This can be relevant for many self-employed persons who started building up a pension late. Check with your provider whether your pot falls below this limit before deciding to withdraw.

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Withdrawing pension investments always means paying tax

A misconception we often encounter: people think that they do not pay tax on regular withdrawals because they already received a tax benefit when they paid in. That is incorrect. You always pay income tax on the withdrawals from your pension. The good news is that the rate is often lower than during your working life. As someone eligible for the State Pension, you pay 17.92% in the first bracket instead of 35.82%. Your total income is usually lower, meaning a larger part falls into this low bracket. Someone who was in the second bracket of 37.48% during their working life may largely pay the low State Pension rate with a modest pension. This saves thousands of euros over the entire withdrawal period.

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Alternatives to withdrawing pension investments early

Do you temporarily need money but want to avoid the penalties? There are better alternatives than withdrawing pension investments early. For example, you can stop paying in without fiscal consequences - your pension pot will then simply continue to grow until your withdrawal age. You can also build up free capital alongside your pension that is immediately accessible. At Vive, we therefore offer free investing in addition to pension investing, so you can save for different goals. Also, consider maintaining a buffer for emergencies, so you are not tempted to access your pension.

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Why fixed money is actually an advantage

The rules surrounding early withdrawal of pension investments feel restrictive, but they protect you against yourself. Behavioural research often shows that people tend to spend their assets faster if they have free access to them. By locking the money until around your State Pension Age, you are guaranteed to build up capital for later. You cannot, in a panic, spend your pension on an impulse purchase or temporary financial difficulties. At Vive, you can always see in the app how much you have built up and what your expected pension will be, so you remain motivated to continue investing, even if the money is not immediately accessible.

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