What is the AOW?

AOW (General Old Age Pensions Act) is a compulsory national insurance scheme in the Netherlands in which everyone who legally lives or works in the Netherlands participates. This means that people pay a premium and accrue rights for a pension upon reaching the AOW-age.

This age, which was originally 65 years, is gradually being increased to ensure the sustainability of the pension system.

The AOW was introduced in 1957 under the Drees cabinet and functions as a state pension based on a pay-as-you-go system, also known as the first pillar of the Dutch pension system.

Pension is an insurance for income when the regular income ceases due to old age, disability or death. It insures a (family) income against these risks and can be built up in various ways, with pension saving or pension investing being a common method.