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Shaping your financial affairs

When a change occurs in your personal circumstances, you will likely have questions about it. You might face decisions and choices you don't think about on a daily basis. We are happy to help you organise your financial affairs: with financing a home or renovation, with taking out insurance, and with planning a stable financial future.
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Helping to think through important decisions

You're buying your first home, you already own a home but want to change your mortgage, you're ending a relationship... we can imagine you have many questions. What's possible? What are the rules you need to follow? We'll think along with you and help you make important decisions.

You are buying your first home

Buying your first home is a very exciting prospect. There are various financial matters you need to consider and make decisions on. We are happy to help you think through these so that you can make the choices that suit your situation and personality.

First, we will review together what the total investment for the purchase of the property will be. After that, we will fill in with which means or sources we will finance this investment. Think, for example, of a mortgage, the contribution of own funds, or a Personal Loan, a Family loan or one Gift. Of course, a combination is also possible.

You are buying your first home

When determining the maximum mortgage, the lender takes into account:

Your income
Your monthly mortgage payments should fit within your total income minus any existing financial obligations. The ‘Temporary Regulation on Mortgage Credit’ specifies the percentage of your income that the government deems acceptable for mortgage payments.

2. The market value of the property
The market value of the property to be purchased can be determined in three ways:

The purchase price of the property
The purchase/adoption price, potentially increased by construction interest, interest during construction, redemption payment for leasehold, additional work, and/or connection to public utilities
The appraised value, possibly after renovation

You may borrow up to 100% of the market value to purchase a property. If you carry out energy-efficiency measures, the maximum loan amount may be 106%. For the time being, there are no plans to reduce this further.

Existing loans and/or liabilities

A lender will always carry out a credit check with the Credit Registration Bureau (BKR). This is because they want to know whether you already have any financial obligations and what your payment history is like. If you already have a consumer loan, this will affect the maximum mortgage amount you can obtain. This is because 2% of the credit limit is taken into account as a monthly financial burden. Some lenders are prepared to base their assessment on the lower actual costs of your financial obligation.

Do you have a student loan taken out before 1 July 2015? If so, 0.75% of the outstanding debt must be included in the assessment as a monthly financial burden. Student loans taken out after 1 July 2015 may be repaid over a period of 30 years. These loans count as 0.45% in the calculation of the maximum mortgage amount.

If you have a private lease contract, 65% of the total lease amount is recognised as a financial liability. Of this amount, 2% per month is recognised as a financial expense.

When you pay spousal maintenance, this will affect the maximum mortgage amount you can obtain. For the period that you pay spousal maintenance, this will be deducted from your notional income.

Mortgage interest relief and mortgage types

When you first buy your own home, you'll encounter what's known as mortgage interest relief. You can deduct the annual interest from your mortgage from your income, meaning you pay less tax. The tax rules ensure that you repay the entire mortgage within 30 years. If you do not do so, you will lose this right to mortgage interest relief.

You can choose between two options as a starter mortgage typesan annuity mortgage and a linear mortgage.

National Health Group

Subject to conditions, you can finance the property with National Mortgage Guarantee (NHG). The National Mortgage Guarantee Foundation then provides a guarantee. An NHG mortgage offers extra security for both you and the lender. This often results in a more favourable interest rate than with financing without NHG.

Life insurance

When buying your first home, it is important to adequately cover the risk of death. The financial consequences of your death can have a significant impact on your partner and your children. Naturally, you will want them to be well provided for.

om het risico van overlijden af te dekken kunt u een levensverzekering afsluiten. Life insurance take out. Some lenders will also require you to do so as security, usually if the loan-to-value ratio exceeds 80% of the market value. For loans based on the NHG scheme, life insurance is no longer compulsory.

Occupational disability insurance

Yes Unemployment of Incapacity for work can have major consequences for your income. Naturally, you’ll want to continue living in your home. That’s why it’s important to also identify these risks properly and – if necessary – cover them by taking out income protection insurance.

(New) Construction fund

If you co-finance a renovation, the lender will place the amount you need for the renovation in a ‘building depot’. You can declare the invoices you need to pay or that you have paid yourself from the building depot. You will receive interest on the amount in the building depot.

Even with a newly built home, the lender sets up a construction deposit for the total investment. The purchase of the land and the construction costs will be paid from this construction deposit. The latter will be paid in phases as construction progresses.

Furthermore, there are possibilities to finance any potential double charges (loss of interest) during construction.

Higher mortgage registration

When you take out a mortgage, it is registered in the so-called mortgage register at the Land Registry.

If you are able to secure a mortgage for a higher amount than you need, you can choose to have the mortgage registered at a higher amount. The amount entered in the register will then be higher than the amount you are actually borrowing under the mortgage. The advantage of this is that if, for example, you wish to finance a renovation after a few years, you can increase the loan with the lender up to the registered amount without having to visit the solicitor again. However, you should bear in mind that the lender will reassess your financial situation when you request a private increase. You can never borrow more than is possible based on your income and the value of the property.

You are buying another home

There are plenty of reasons to want to buy another house. But such a decision is not made lightly. There are various financial matters to consider and decide upon. If you are going to buy a new home, your current home must eventually be sold. Selling your current home first offers financial peace of mind, as you will know where you stand. However, what do you do if your dream home is for sale? We are happy to think along with you so that you can make choices that suit your situation and personality.

First, we will assess the financial implications of the (eventual) sale of your current home. If you sell your home for a higher amount than the outstanding mortgage debt, you will have a surplus. This surplus reduces the maximum deductible mortgage when purchasing a new home, the so-called Co-borrowing scheme.

When you sell your property for a lower amount than your mortgage debt, this is known as a shortfall. If you do not have your own funds available for this, you can take out a loan. The rules for this apply to the residual debt financing applies.

Next, we will go through with you an overview of what the investment for the purchase of the property will be.

Finally, we will create a total budget of the required investment to settle both financial transactions. We will then fill in what funds or sources we will use to finance this investment. Think, for example, of a mortgage, with or without residual debt financing, of using personal funds, of a Personal Loan, a Family loan or one Gift. Of course, a combination is also possible.

When processing your mortgage, we will of course take the following into account:

Maximum mortgage

When determining the maximum mortgage, the lender takes into account:

1. Your income Your monthly mortgage payments must fit within your total income minus any existing obligations. The ‘Temporary mortgage credit scheme’ specifies the percentage of your income that the government allows to be spent on mortgage payments.

2. The market value of the property The market value of the property to be purchased can be determined in three ways:

The purchase price of the property The purchase price or contract price, plus any construction interest, interest during construction, ground rent buy-out, additional works and/or connection to public utilities The appraised value, possibly after renovation You may borrow up to 100% of the market value for the purchase of a property. If you carry out energy-efficiency measures, the maximum loan may be 106%. For the time being, there are no plans to reduce this further.

Existing loans and/or liabilities

A lender will always carry out a credit check with the Credit Registration Bureau (BKR). This is because they want to know whether you already have any financial obligations and what your payment history is like. If you already have a consumer loan, this will affect the maximum mortgage amount you can obtain. This is because 2% of the credit limit is taken into account as a monthly financial burden. Some lenders are prepared to base their assessment on the lower actual costs of your financial obligation. If the costs are fixed for the term of a loan, the actual costs are usually used.

Do you have a student loan debt dating from before 1 July 2015? If so, 0.65% of the outstanding debt must be included in the assessment as a monthly financial burden.

Student loans taken out after 1 July 2015 may be repaid over a period of 35 years. These loans count as 0.35% towards the calculation of the maximum mortgage amount.

The level of these percentages depends on the interest paid on student debt.

If you have a private lease contract, 100% of the total lease amount is recognised as a financial liability.

When you pay spousal maintenance, this will affect the maximum mortgage amount you can obtain. For the period that you pay spousal maintenance, this will be deducted from your notional income.

Mortgage interest relief and mortgage types

Your current mortgage debt is relevant for calculating the duration of the Mortgage interest relief and the permitted mortgage type.

If you took out a mortgage before 1 January 2001, the 30-year term for that loan with that amount started on 1 January 2001. For new loans, a new 30-year term always starts.

With the new mortgage rules from 1 January 2013, you may be eligible for the Transitional law. If this is the case, you can continue with your existing mortgage type. For any additional loan, the rules applicable from 1 January 2013 will apply; you can then choose between two mortgage typesan annuity mortgage and a linear mortgage.

National Health Group

Subject to conditions, you can finance the property with National Mortgage Guarantee (NHG). The National Mortgage Guarantee Foundation then provides a guarantee. An NHG mortgage offers extra security for both you and the lender. This often results in a more favourable interest rate than with financing without NHG.

Life insurance

When buying your first home, it is important to adequately cover the risk of death. The financial consequences of your death can have a significant impact on your partner and your children. Naturally, you will want them to be well provided for.

om het risico van overlijden af te dekken kunt u een levensverzekering afsluiten. Life insurance take out. Some lenders require you to cover, as a minimum, the amount by which the market value of the property exceeds 80% with a decreasing term life insurance policy.

Occupational disability insurance

Yes Unemployment of Incapacity for work can have major consequences for your income. Naturally, you’ll want to continue living in your home. That’s why it’s important to also identify these risks properly and – if necessary – cover them by taking out income protection insurance.

(New) Construction fund

If you co-finance a renovation, the lender will place the amount you need for the renovation in a ‘building depot’. You can declare the invoices you need to pay or that you have paid yourself from the building depot. You will receive interest on the amount in the building depot.

Even with a newly built home, the lender sets up a construction deposit for the total investment. The purchase of the land and the construction costs will be paid from this construction deposit. The latter will be paid in phases as construction progresses.

Furthermore, there are possibilities to finance any potential double charges (loss of interest) during construction.

Higher mortgage registration

When you take out a mortgage, it is registered in the so-called mortgage register at the Land Registry.

If you are able to secure a mortgage for a higher amount than you need, you can choose to have the mortgage registered at a higher amount. The amount entered in the register will then be higher than the amount you are actually borrowing under the mortgage. The advantage of this is that if, for example, you wish to finance a renovation after a few years, you can increase the loan with the lender up to the registered amount without having to visit the solicitor again. However, you should bear in mind that the lender will reassess your financial situation when you request a private increase. You can never borrow more than is possible based on your income and the value of the property.

You want to change the mortgage.

Renovation

You can finance a renovation of your home in several ways. You could use your savings or perhaps you will receive a gift.

You can also increase your mortgage. This can be done in two ways. You can increase your current mortgage or you can take out a second mortgage. Another possibility is to take out a Personal Loan.

You can increase an existing mortgage without the involvement of a notary, but then you must have had a so-called higher registration included in the mortgage deed at the time of purchasing the property. This is called ‘increasing informally’.

The lender will reassess your income and the value of the property both when increasing the mortgage by mutual agreement and when taking out a second mortgage. You may borrow up to 100% of the market value to purchase a property. If you carry out energy-saving measures, the maximum loan amount may be 106%. For the time being, there are no plans to reduce this further.

If the aim of the renovation is to make your home more energy-efficient, you may be able to borrow more. We can provide further information on this.

The requested mortgage amount will be placed in a construction deposit. From this, the bank will pay the renovation invoices. This can be done to you or directly to the construction company.

You have the choice between two mortgage typesan annuity mortgage and a linear mortgage. The interest on the mortgage used to finance the renovation is tax-deductible, provided that the loan is repaid over 30 years, at least on an annuity basis.

In some situations, it may be more advantageous to take out a Personal Loan to finance renovations. Lenders look at your income differently.

Extra repayments

Making an extra repayment on your mortgage can be worthwhile. It’s important to know the maximum amount you can repay each year without incurring penalty fees from your lender.

Lenders work with so-called rate classes: the ratio between the value of the house and the size of the mortgage. Your mortgage can move into a different rate class through an extra, small repayment. This means that the interest rate calculated for you will be lower.

If you have a savings account mortgage, it's worth checking if an extra deposit into the savings account could lead to lower monthly payments or possibly a shorter term.

A redemption or additional payment can have an effect on your Box 3 assets and the wealth tax you have to pay, in addition to the effect on your mortgage.

Switching to a different lender

Switching to a different lender is also called ‘refinancing’. Refinancing a mortgage can mean that you will pay a lower interest rate or that your mortgage will fall into a more favourable rate class.

When refinancing, you take out a new mortgage with a different lender. You use this to pay off your current mortgage. However, refinancing costs money: you have to pay the advisor, the notary, and the appraiser.

In addition to the costs mentioned above, there is another cost to consider: any penalty your current mortgage provider may charge. When determining the penalty interest, most mortgage providers look at the difference between the current mortgage interest rate and the rate you are paying. This difference is multiplied by the remaining term of the fixed-interest period. The penalty therefore represents the lost interest income. This amount can be quite substantial, especially if the fixed-interest period has a long time left to run.

Despite the mentioned costs, breaking your contract can be financially attractive.

Interim interest rate adjustment and interest rate averaging

A number of lenders offer the possibility to change the fixed interest rate period mid-term. You might consider this, for example, when the market interest rate is lower than the rate you are paying. However, your lender will likely miss out on interest income as a result and will therefore charge a penalty for this. The amount of any penalty must, of course, be weighed against the lower monthly payments, otherwise a mid-term change to your fixed interest rate period makes no sense.

Additionally, there are lenders who average your current interest rate with the market interest rate. Any penalty payable is not charged to you directly, but rather calculated as a premium on the new interest rate. This method of obtaining a lower interest rate is called interest averaging.
Please feel free to contact us to find out what might be of interest in your situation. We can also inform you about the rules and possibilities with your lender.

You're separating. What now?

When you and your partner decide to separate, you'll face many financial questions and decisions. Having your own home with a mortgage makes everything even more complicated. Can you or your ex-partner continue to live in the home? And how should you arrange this? Or is it wiser to sell the home after all?

What happens to a property and mortgage after a divorce depends on your personal situation. In whose name are the property and mortgage? What are the tax implications? What are the lending institution's terms and conditions?

We will now consider a number of possible situations. It is always important to distinguish between the legal and fiscal consequences.
You wish to remain living there and the property is jointly owned

Legal

You are effectively buying half of your ex-partner's property. The first step is to agree on the value of the property. If half the value of the property is higher than half the value of the mortgage debt, there is equity, and you will need to compensate your ex-partner for this. If there is a shortfall, your ex-partner will have to pay you compensation.

The value of any repayment products must also be divided. Think, for example, of the balance of the savings account or of pledged investments/policies.

Fiscal

For a fiscally correct calculation, a split must be made in proportion to the ownership ratio.

For tax purposes, you retain the existing rights to your share of the property and your share of the mortgage. Dit heet ‘Transitional law’This also often allows for an interest-only mortgage or a bank savings mortgage. The new rules apply to the mortgage you need to purchase your ex-partner's share: you must repay at least an annuity.

The 30-year term for the mortgage interest relief on your existing mortgage will continue to apply. For the new portion of the mortgage, the 30-year term will recommence.

Example

The property is valued at €200,000 and the outstanding mortgage debt is €210,000. The mortgage is divided into an interest-only mortgage of €100,000 and a savings bank mortgage of €110,000.

Your share consists of:

Property value €100,000
Interest-only mortgage €50,000
Bank savings mortgage €55,000
Shared purchase from your ex-partner:

Purchase price £100,000

The total investment or required mortgage (excluding any costs) amounts to €205,000. You can fund this investment as follows:

€50,000 interest-only mortgage
€ 55,000 bank savings mortgage
€100,000 annuity mortgage

You must also take into account the tax advantages of ongoing repayment products. These can often fiscally seamless continuation become.

Once it is clear what your options are, it is important to see if you can stay with your current lender or if switching to a different lender would be more appealing.

If you wish to remain with your current lender, they will assess whether you have sufficient income (taking into account any spousal maintenance where applicable) to cover the costs. This is also known as ‘discharge from joint liability’. If the old mortgage was provided on the basis of NHG (National Mortgage Guarantee), the requirements are sometimes more lenient.

If the outcome is that it is wise for you to switch to another lender, the lender will assess the application in accordance with normal acceptance rules. You will effectively be remortgaging.

Your ex-partner wants to stay living in the property, and it is jointly owned.

Legal

Your ex-partner is buying your share of the property. The first step is to reach an agreement on the value of the property. If half the value of the property is higher than half the value of the mortgage debt, there is equity and your ex-partner will pay you compensation. If there is under-value, you will have to pay your ex-partner compensation.

And of course, your ex-partner must ensure that you are released from joint liability for the old mortgage.

Also the value of any redemption products (the balance of the bank savings account or pledged investments

Fiscal

For a fiscally correct calculation, a split must be made in proportion to the ownership ratio.

Once again it applies Transitional law so that also often a piece interest-only mortgage of a savings account mortgage is possible. This may be important if you are purchasing a new home in the calendar year or the year after.

Any reimbursement of the capital gain will reduce the maximum deductible mortgage for the purchase of a new property, the so-called Co-borrowing scheme.

If there is an undervaluation and you do not have the own funds available, you can take out a loan. The rules for the residual debt financing applies.

The 30-year term for mortgage interest relief on your existing mortgage still applies. For any new portion, the 30-year term will restart.

The fiscal possibilities of ongoing repayment products must also be taken into account in the considerations. Sometimes these can fiscally seamless continuation become.

You are selling the property

Legal

If you sell the property, the surplus value or deficit value must be shared according to the ownership ratio.

The value of any repayment products (for example, the balance of the savings account or pledged investments/policies) must also be divided.

Fiscal

Your existing equity reduces the maximum deductible mortgage when purchasing a new property, the so-called Co-borrowing scheme.

When there is under-valuation and you have no own funds, you can take out a loan. The rules for this are residual debt financing applies.

The 30-year term for mortgage interest relief on your existing mortgage will continue to apply. For any new portion, the 30-year term Reconsider.

It is common for a property to be on the market for some time before it is actually sold. There is a good chance that you or your ex-partner will remain in the property during that period. If you leave the property and your ex-partner stays, you may still have to pay your share of the mortgage. In this situation, the divorce settlement applies and you are entitled to mortgage interest relief for two years. If you also pay your ex-partner's share of the costs, these costs may be deductible as spousal maintenance.

The fiscal possibilities of ongoing repayment products must also be taken into account in the considerations. Sometimes these can fiscally seamless continuation become.

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Income

A financially stable future

Sometimes situations arise that can have major consequences for your finances. It's not pleasant to dwell on them, but it is important. We believe it's important that you and your family are assured of a financially stable future, even in cases of disability, death, and unemployment.

Even after you stop working, an income is important. You should already be thinking about this. We are happy to help you shape your pension build-up and your wealth build-up.

You are incapacitated for work

During the first two years, your employer is obliged to continue paying your salary. The minimum obligation is 70% of your last salary (capped at 70% of the maximum annual salary of €66,957). Many terms and conditions of employment stipulate that the employer voluntarily continues to pay a higher amount.
If you have been ill for almost two years and your illness means you can work less, you can apply for a WIA benefit from the UWV.
The WIA comprises 2 schemes, namely WGA and IVA. What you are entitled to depends on whether or not you will be able to work in the future.
You are entitled to an IVA benefit if you have been unable to work for more than 80% and if the likelihood of a (partial) recovery is low. The benefit amounts to 75% of your last salary (capped at 75% of €66,957).
If you are unable to work for less than 80% and at least 35%, and there is a chance of full or partial recovery, you are entitled to a WGA benefit. The WGA is initially based on your last earned salary (wage-related period). The duration of the earnings-related benefit depends on your employment history. This benefit lasts for a minimum of 3 and a maximum of 24 months. If you have an employment history of 24 years or more, a transitional arrangement applies.
For the first two months, the amount of the earnings-related benefit is 75% of your salary (capped at 75% of €66,957). From the third month onwards, your wage-related benefit will be 70% of your salary (capped at 75% of €66,957).
Once the wage-related benefit has ended, the amount of your benefit will depend on the extent to which you are actually utilising your earning capacity. If you are still able to utilise at least 50% of your earning capacity, you will receive a benefit of 70% (wage supplement). If you are able to utilise less than 50% of your earning capacity, you will receive a benefit based on the minimum wage. By way of example: with 50% incapacity for work and no utilisation of your residual earning capacity, your income will amount to €8,808 per year.
If you are unable to work to less than 35%, you are not entitled to benefits from the UWV.
In almost all situations, your income will decrease significantly to very significantly. Many employers offer the option to take out supplementary insurance for this (WIA supplementary insurance). In addition, employers often also pay part of the premium as part of the employment benefits package.
We advise you always to first check if you can make use of these options. If you cannot make use of the facilities through your employer, or if these facilities are insufficient, you can consider taking out additional cover yourself. This could include a private supplementary WIA (Work-related Income Benefit) insurance or a mortgage protection insurance.
Naturally, we are happy to help you analyse your income situation in the event of incapacity for work. We can also assist you in making supplementary arrangements.

Life insurance

When you pass away, there can be significant financial implications for your loved ones. Naturally, you want nothing more than for them to be well looked after.
To cover the risk of death, you can take out life insurance. With this, you insure a certain amount for a certain term. If you die within that term, the insurance will pay out the agreed amount. This can then be used to pay off the mortgage, but it can also be added to your assets. Your surviving relatives can then draw the desired supplementary amount from these assets for a shorter or longer period of time.
It is important to determine what income your partner will receive when you pass away. The income consists of their own income, possibly supplemented by a benefit from the General Dependants' Law, with a partner's pension, with income from assets and with benefits from other insurances.
When we know what income your partner receives and when we have insight into what your partner needs, we can determine how much should be insured and for what term.
If you have very young children, when determining the amount of capital to insure, also consider any potential extra costs for childcare if your partner continues to work, or the fact that your partner might work less for a period due to childcare responsibilities.
If you receive maintenance and your ex-partner dies, the maintenance payments will cease. To compensate for this loss of income, you can take out life insurance.
In broad terms, there are three different types of death in service insurance:
  1. Fixed
    The insured amount is fixed for the duration of the policy. It makes no difference whether you die at the beginning or at the end of the term.
  2. Annuity decreasing
    The insured amount decreases over the term. At the start of the term, the insured amount will fall slowly and accelerate towards the end of the term. The decrease in the insured amount depends on the annuity rate.
  3. Linear descending
    The insured amount decreases by a certain fixed amount during the term.
It often turns out that a good solution for covering the risk of death is a combination of different coverages and terms.

You are unemployed

If you are an employee and become fully or partially unemployed, you may be entitled to unemployment benefit. You must meet a number of conditions for this.
You are entitled to a WW benefit if you:
  • You are insured against unemployment. This is usually the case if you are employed as an employee and have not yet reached the state pension age.
  • 5 hours or more of your working hours per week are lost and you have no entitlement to pay for those hours.
  • Immediately available for paid work.
  • You must have worked for at least 26 weeks in the 36 weeks before you became unemployed (weekly claim).
  • You have not become unemployed through your own fault. If you resign yourself, you are only entitled to unemployment benefits in exceptional cases.
On 1 July 2015, the WW [Unemployment Insurance Act] was partially amended. As of 1 January 2016, the duration and accrual of the WW will also be changing. The duration of the WW benefit depends on your employment history. The benefit will last for a minimum of 3 and a maximum of 24 months. A transitional arrangement applies to employees with an employment history of 24 years or longer. Employers and trade unions are currently in discussion to see if the maximum benefit duration can be extended again to a maximum of 38 months. For this extension, employees will likely be asked to make a personal contribution.
Regardless of your entitlement to unemployment benefits, joblessness always results in a significant drop in income. For short periods of unemployment, the consequences may still be manageable or there may be options to supplement your income from your assets.
If there is insufficient capacity to cover temporary setbacks, it is worth considering taking out mortgage protection insurance. Such a policy provides a net payout for a maximum duration of 24 months.
In cases of long-term and structural unemployment, you may have to significantly adjust your spending levels. You might even have to sell your home. In some situations, we may be able to find a solution for any outstanding debt. This would require financing based on an NHG guarantee.

You are retiring

Many employees whose careers are coming to an end look forward to the moment they can stop working. The prospect of more free time, and therefore more time for things like travel, volunteering, and (grand)children, appeals to many people. But when exactly can you stop working?
The Netherlands has a unique pension system. The system consists of three pillars: the state provision AOW, the pension scheme via the employer, and individual provisions.

The first pillar, AOW:

Everyone who is a resident in the Netherlands builds up AOW (state pension) entitlement. If, for example, you live abroad, this accrual can stop, meaning fewer AOW years are accrued.
The state pension age will gradually increase to 67 by 2021. In 2022, 2023 and 2024, the state pension age will be 67 years and 3 months. From 2025 onwards, the state pension age will be linked to life expectancy. You will receive your first state pension from the day you reach the state pension age.
The AOW benefit amount is €18,030.84 for a single person and €12,301.32 for someone with a partner.

The second pillar, employer pension:

Dutch employers are not obliged to offer their employees a pension scheme.
However, there are two important exceptions to this. An employer must offer a pension scheme if it falls under a mandatory industry pension fund or if such provision has been arranged in the company's (collective) employment terms. In the employment terms, agreements are also made between the employer and employee regarding the division of payment of premiums for the pension scheme.
There are fundamentally two common pension building systems:

Target schemes such as average salary or final salary.

These schemes pay out a certain percentage of the salary from the moment of retirement. The amount depends on the number of years of service and the accrual rate. Under an average-earnings scheme, the aim is to reach 70% of the average salary earned over the course of one’s career; under a final-salary scheme, this is 70% of the last salary earned.
Naturally, these arrangements also insure survivor's pensions and orphan's pensions. The amount of the pensions is derived from the attainable old-age pension. Often, continued pension accrual in the event of incapacity for work is also insured as a supplement.
One advantage of such schemes is that you have more certainty about the pension to be achieved. Disadvantages can be that the costs for these schemes are highly dependent on the returns of the pension fund or insurer and on the development of life expectancy. Because the current interest rate is very low and life expectancy is rising sharply, these types of schemes are becoming increasingly expensive for employers and employees. There is therefore a trend not to offer or to terminate these types of schemes.

Applicable premium scheme.

The ‘available premium scheme’ is a pension scheme in which the employer makes a premium available for you, which is used to build up a pension. In addition, the employer pays a premium for insuring survivor's pensions and orphan's pensions, and for continued pension accrual in the event of disability. The pension scheme lays down agreements on the cost allocation between employer and employee.
The premium is a percentage of the pensionable salary (the part of your salary on which you build up a pension). The higher the premium, the higher the final pension can be. However, there are fiscal upper limits for the premium. The Tax Administration uses so-called scales for this, in which the premium increases as age increases.
The premium for building up a pension is invested. Generally, the investor opts for ‘Life Cycle investing’. This is a method whereby the risk profile of the investment portfolio for the participant changes based on their age. As the participant gets older (and closer to their retirement age), the overall risk of the investment portfolio is reduced.
On the date you retire, your investment pot will be used to purchase an annuity. In a defined contribution scheme, the amount of pension you receive is therefore not guaranteed; the outcome depends on the investment returns achieved and the annuity rates (current interest rates) at the time of purchase.

The third pillar, individual provisions:

First and foremost, you should consider tax provisions. If you have a pension shortfall, you can save/invest for an additional pension within certain tax limits. This can be done through a life annuity insurance policy with an insurer or through a bank savings account. You can deduct the premium/deposit for income tax within certain limits. You can use the accumulated balance to purchase an additional private pension. These payouts are taxable for income tax.
Another – and often forgotten – alternative is the cancellation of financial obligations when you stop working. In this context, you could consider, for example, paying off the mortgage, and the costs for your children’s education.

When to stop working?

It is, of course, possible to stop working before you reach state pension age. Almost all pension schemes offer the option of taking your pension early. However, you should bear in mind that this will result in a significant reduction in your final pension. A good rule of thumb is that you will receive 8% less pension for every year you retire early. In addition, almost all pension providers offer the option to compensate for the loss of your state pension (AOW) benefit. However, this compensation also results in a lower old-age pension from your state pension (AOW) date onwards.
Creating good pension planning is a bespoke process. We are happy to help you map out your current provisions and to make any necessary supplementary arrangements.

You want to plan your finances

Making choices for the future is difficult if you have insufficient insight into the current financial situation and into the desired financial situation in the future.
Together with you, we would be pleased to perform an analysis of the current situation and an analysis of the desired future situation. This future can be short-term or long-term. Financial planning will enable you to make informed choices. The analysis will show the consequences for your net disposable income and for the development of your assets. Ultimately, it all comes down to one thing: having sufficient income and assets for the future to fulfil your financial wishes and to cover any potential risks.
When we create a financial plan with you, we will discuss the following topics with you:
  • your (future) income,
  • your assets,
  • your mortgage,
  • the diverse risks: death, disability, and unemployment,
  • your insurances.

You want to build wealth (saving & investing)

Whether you are saving money for the future, for your children, or for unforeseen expenses, if at all possible, you will want to make a return on it.
There are several ways to invest your assets:
  • Saving,
  • Investing,
  • a combination of both.
The choice you make depends, among other things, on the goal you have in mind, the level of risk you are willing to take, and – not insignificantly... – on your gut feeling.

Saving

It is important that you set aside money for unforeseen expenses. If you do not know when you will need the money, we recommend doing so through savings.
We can open a savings account for you and your children. We compare different banks so that you can deposit your money with a bank that is reliable and offers attractive interest rates.
You can choose between a variable interest rate and a fixed interest rate. If you opt for a fixed rate, you can deposit your funds for a longer period at a higher interest rate. This is known as fixed-term savings. A disadvantage of fixed-term savings is that it is not flexible, as you may incur a penalty if you wish to withdraw the money before the agreed term has expired.

Investing

There are various investment opportunities. These also come with different risks. In principle, the higher the promised return, the greater the risk you run. A good way to structure your investments stems from an investment profile that you complete. This investment profile is used to further define the allocation within the portfolio.

Deposit Guarantee Scheme

If a bank licensed by De Nederlandsche Bank goes bankrupt, De Nederlandsche Bank guarantees an amount per account holder. This is called the ‘deposit guarantee scheme‘. Individuals and small businesses can make use of this. Small businesses are companies that are permitted to publish abbreviated balance sheets.
Almost all current accounts, savings accounts, fixed-term deposits and banked annuity savings accounts are covered by the deposit guarantee scheme. The guarantee from De Nederlandsche Bank is a maximum of €100,000. This amount applies per account holder per bank. If you have a joint account, each of you is entitled to the maximum guarantee of €100,000.
We advise you to check your own (savings) accounts and, where necessary, to spread your funds across different banks.

Annuity insurance / bank savings account

A special form of wealth accumulation for old age is annuity insurance or bank savings accounts. The aim of this is to build up extra income upon retirement. If you have a pension deficit, you may deduct the contributions from your taxable income during the accumulation phase. The choice you have for building wealth is via investing or saving. In the payout phase, you will then have to pay tax on the payouts.
Everything around

Pity
Insurance

Insurance that covers your damage

If you suffer damage, it’s reassuring that your insurance covers that damage. This applies to damage to your home, your vehicle, or damage you suffer while travelling or as a result of having an accident.
You may also accidentally cause damage to others. You can insure yourself against the financial consequences with the help of a liability insurance. Legal assistance in the event of conflicts can be insured with legal expenses insurance.

Insuring your property/buildings.

With a building insurance policy, you insure against the financial consequences of damage to your home, outbuildings, boundary fences, and solar panels.
The buildings insurance is based on the principle of replacement value. This means that you can replace or have items repaired that have been lost or damaged to the same qualitative standard.
The rebuild value is determined by completing a rebuild value calculator or based on the postcode and house number. This provides you with a guarantee against underinsurance.
Improvements you make later, or that are not included in the purchase price of the new-build home, must be added separately.
When you own a flat, a building insurance policy must be taken out for the entire building/complex. The Owners' Association (VvE) must arrange such insurance. It is in your interest to check with the VvE of your apartment complex whether the insurance has actually been taken out.
You must also check whether the owner's interest is covered by the building insurance. By owner's interest, we mean all improvements to the property made at your own expense. If this is not covered by the joint building insurance, you can take out separate insurance for it.
The buildings insurance is a mandatory insurance for anyone who owns a property with a mortgage.

Insure your household contents properly.

Your household contents mainly comprise ‘movable items’ in and around your home, such as (garden) furniture, televisions, and clothing. If these items are stolen or damaged by fire, for example, the household contents insurance covers the financial loss with which you can purchase replacement items.
A contents calculator helps you determine the value of your belongings, so you don't run the risk of being underinsured.
Your home contents insurance often only covers your special possessions for a limited amount, such as jewellery, antiques, art, collections, and similar items. If your possessions have any value, it may be wise to take out separate valuables insurance.

You wish to insure your motor vehicle.

If you intend to drive your motor vehicle on the road, you must take out at least a Third-Party Liability insurance (WA). This is a legal requirement.

Western Australia

This insurance covers all damage sustained by a third party if you are held liable in a collision or accident. Your own damage is not covered.

WA + Limited Hull

With limited hull insurance, the motor vehicle is insured, in addition to third-party liability cover, against damage from, among other things, fire, theft, glass breakage, and collision with animals.

WA + fully comprehensive (all-risk)

With fully comprehensive insurance, the car is insured against all events, even if the damage is caused by your own fault. In the event of a total loss, such as a write-off or theft, with the new-for-old policy, most insurers will reimburse you the new value of the car for the first two years. After these two years, they will reimburse the market value.
The premium for basic insurance (WA) is determined by the driver's age, the car's weight, the number of kilometres driven per year, and often also the region. The premium for limited comprehensive cover is set based on the vehicle's current value. And the premium for fully comprehensive cover is calculated based on the vehicle's new value. The premium also depends on the number of no-claims years you have accumulated.
Driving without claims is rewarded. For every year you drive without claims as an insured person (or for every year you do not make a claim with the insurer), you build up one no-claims year. The more no-claims years you have, the higher the no-claims discount you receive. If you do make a claim, you will lose a number of no-claims years and receive a smaller discount. The discount percentage for no-claims years varies by insurer.
There are several other covers you can include with your motor vehicle insurance:
  • Accidents involving occupants. The occupants are insured in the event of death or permanent disability. The insurance usually pays out a fixed sum of money. It does not matter whether the driver was at fault in the accident or not.
  • Passenger damage. The occupants are insured against damage incurred in a collision. This can be material damage or personal injury.
  • No-claim protection. You can usually make one claim per year without it affecting your no-claims discount. This arrangement varies between insurance companies.

You are going on a trip.

Before you go and enjoy a well-deserved holiday, you should of course take out travel insurance. Basic travel insurance offers cover against damage, theft, or loss of belongings, unforeseen expenses, and medical costs.
Additional modules can be closed for:
  • Cancellation. You are insured for costs incurred if you are unable to travel due to illness, accident or death, or if you have to return home early for any of these reasons.
  • Worldwide coverage.
  • Unusual sports. Such as skydiving, winter sports and underwater sports.

No financial worries after an accident.

An accident insurance policy has two sections; one for death and one for permanent disability. In the event of death, the agreed amount will be paid out. In the case of permanent disability, the amount of the payout depends on the nature of the injury. With the payout you receive for permanent disability, you can, for example, pay for modifications to your home.

What about liability?

You, your family members, or pets can accidentally cause damage to other people's belongings. Claims for damages can be very high and therefore represent a serious financial risk. Personal liability insurance ensures that you are covered against this.

Well assured of legal assistance.

You may find yourself in a situation where legal knowledge is required. Expert assistance is then needed. This sometimes costs a lot of money. With legal expenses insurance, you protect yourself against these costs. You will receive legal assistance and advice for all legal problems that you may encounter as a private individual.
Thanks to its modular structure, we can tailor the cover precisely to your wishes. For example, consider legal assistance in an employment dispute, in case of road traffic incidents, or in disputes with your neighbours.