NETHERLANDS - Just 5.5% of workers have joined the new tax-friendly ‘levensloop', or life-course, scheme in 2006, according to Statistics Netherlands.

Although the scheme is meant to discourage early retirement, 50% of the participants indicated their main aim is to stop working before the official retirement age of 65, it said.

Meanwhile, 43% of employees took part in the (longer existing) tax-friendly ‘spaarloon' scheme, Statistics Netherlands, or CBS, added. Workers can't participate in both schemes at the same time.

With a participation of 8%, the levensloop is most popular with higher educated workers, the CBS found. Of lower paid employees, less than 4% took part.

Older and male workers are relatively more interested in the scheme, than younger and female employees, the CBS stated. The participation of full-time workers and employees in permanent jobs was also above average.

According to the CBS, 30% of levensloop savers haven't decided on the destination of the balance. Six percent is saving for parental leave, whilst 5% intend to use the balance for a sabbatical, it stated.

Probably because a future need is difficult to predict, leave for care, educational purposes or a voluntary job, are hardly a reason for joining the levensloop, the CBS said. 

The present levensloop scheme allows workers to save 12% of their salary tax-free, and use the balance to finance (taxed!) intermediary leave, e.g. parental leave, care leave and education, as well as early retirement. 

Under the spaarloon scheme, employees can save €613 tax-free each year. The balance is blocked for 4 years. The money taken out is being taxed.

Earlier this year, the new government announced an extension of the levensloop scheme. It said it would consider to merge the spaarloon into the levensloop, and to make the scheme applicable to self-employed as well.

The government also announced to extend the options for education and parental leave, and to focus on part-time retirement under the levensloop. In addition, it promised to increase the accessibility of the scheme for lower paid workers.

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