Inflation experiences of retirees

Pension entitlements have not been fully indexed in nominal terms in recent years in the Netherlands (in some case, they have even been reduced) due to low funding ratios at the pension funds. This has urged policymakers to make structural reforms, including a new pension law with a regulatory framework that includes conditions under which wage or price indexation of pension entitlements can occur. The inflation people experience depends on their expenditure patterns and price developments. This paper aims to identify groups of people that have experienced relatively high price inflation over the last few decades and could thus be considered most vulnerable when indexation does not take place. Our findings are based on a study of household budget survey data from 1978 to 2004, supplemented with price information from 1978 to 2012.

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