Pension Investing
Build pension savings with tax advantages, completely outside Box 3. Your contributions are deductible, growth is tax-free, and the assets are exempt from Box 3.
Pension assets are completely exempt from Box 3
of your income deductible as annual space (Future Pensions Act)
reservation space: catch up on missed years
How does pension investing work?
Pension investing, also known as annuity bank savings (banksparen) or annuity investing (lijfrentebeleggen), is a tax-advantaged way to build extra pension savings. You open a special pension account at a bank, insurer or investment platform and make regular or one-off contributions.
The key feature: this wealth is completely outside Box 3. You pay no Box 3 tax on your pension balance, even under the new system (Wet Werkelijk Rendement, 2028). This makes pension investing particularly attractive for anyone wanting to reduce their Box 3 tax base.
At the same time, your contributions are deductible from your Box 1 income (up to your annual space). You pay less tax now, the investment grows tax-free, and only when you receive payouts are they taxed as Box 1 income. Since you typically have lower income at retirement, you generally pay less tax then too.
The tax mechanics in three steps
Contribution: Box 1 deduction
You contribute up to your annual space (30% of your pensionable income). This amount is deducted from your Box 1 income. Immediate tax saving.
Accumulation: tax-free growth
The balance grows through interest or investment returns, completely outside taxation. No Box 3. No tax on capital gains.
Payout: Box 1 income
When you receive payouts, you pay Box 1 tax. You are typically retired with lower income at that point, and therefore a lower tax rate.
Annual space and reservation space
Annual space (jaarruimte) is the maximum amount you can contribute with tax benefits this year. The calculation depends on your income, the state pension threshold (AOW-franchise) and your employer pension accrual. Thanks to the Future Pensions Act (2023), the annual space has been raised to 30% of your pensionable income. This is a significant increase from the previous 13.3%.
Reservation space (reserveringsruimte) is unused annual space from previous years that you can still deploy. You can now go back up to 10 years (was: 7 years). Anyone who has contributed little or nothing in recent years can make a substantial catch-up contribution.
Contributing after state pension age: Where you previously had to stop contributing when you reached state pension age (AOW), you can now continue for 5 more years afterwards. This is particularly relevant for people who continue working longer.
Calculate your personal annual space using the Belastingdienst tool. You will need your income statement and pension accrual statement from your pension fund.
Forms of pension investing
Annuity savings account (banksparen)
Savings account at a bank with fixed interest. Low risk, but also lower returns. Suitable if you prefer certainty.
Annuity investment account
Invest in index funds or ETFs via a pension account. Potentially higher returns, but also more risk. Popular with active investors.
Life annuity insurance
Via an insurer, sometimes with guarantees. Less flexible than bank savings, but offers additional insurance coverage.
Providers include ABN AMRO, ING, Rabobank, Triodos, ASN Bank, BrandNewDay and NN. Always compare costs and terms.
Advantages and disadvantages
Advantages
- Pension assets do NOT count as Box 3 wealth
- Contributions fully deductible in Box 1 (up to annual space)
- Tax-free growth of your investments
- More room under the Future Pensions Act (30% rule)
- Reservation space: catch up on up to 10 previous years
- Can continue until 5 years after your state pension age
- Available to self-employed individuals too
- Wide range of providers: banks, insurers, neo-brokers
Disadvantages
- Money is locked until (around) your pension date
- Withdrawals are taxed as Box 1 income
- Maximum contribution limited by annual space
- No access in emergencies without penalty tax
- Suited for pension build-up, not liquid capital
- Payout duration and structure are rule-bound
Who is it suitable for?
Suitable for
- Employees and self-employed with a pension shortfall
- Investors who want to reduce Box 3 taxation
- People who already maximise employer pension contributions
- Anyone wanting to benefit from the 30% annual space rule
- Older investors who want to contribute up to 5 years after state pension age
Less suitable for
- People who need the money within 10 years
- People without a pension shortfall (no annual space)
- Liquid capital needed for investments or emergency funds
- People who already fully use their annual space
Pension investing vs. Investment BV
| Feature | Pension investing | Investment BV |
|---|---|---|
| Box 3 tax | None (exempt) | None (Box 2) |
| Contributions deductible | Yes (Box 1) | No |
| Access to capital | Limited (pension) | Flexible |
| Setup costs | None | € 500–1,000+ |
| Annual costs | Low (0.1–0.5%) | € 1,500–3,000+ |
| Suitable for | Anyone with space | Assets > €150k |
| Maximum contribution | 30% of income | No limit |
| Payouts taxed as | Box 1 (income) | Box 2 (dividend) |
Neither replaces the other. A combination is often optimal for larger portfolios.
Calculate your Box 3 impact
See how much Box 3 tax you save by shifting assets into pension investing.
Go to calculatorAlso interesting
An investment BV offers more flexibility but higher costs. Read the comparison.
Box 2: Investment BVKey facts (2025/2026)
- Annual space
- 30% of pensionable income
- Reservation space
- Up to 10 years back
- Contribution after AOW
- Up to 5 years after
- Max temporary annuity 2026
- € 27.192
- Box 3 status
- Fully exempt
- Payout taxation
- Box 1 rate
Source: Belastingdienst.nl. Always consult a financial adviser for your personal situation.
Pension investing is not suitable as a short-term investment. You can only access the money at (approaching) retirement. Early withdrawal leads to revision interest (typically 20% penalty tax).