Ethnically diverse Dutch people often more financially vulnerable

Ethically diverse Dutch people, particularly with non-Western roots, are on average more financially vulnerable than Dutch people with no migration background. That said the Netherlands Authority for the Financial Markets (AFM) in a report. According to the regulator, this is due to, for example, a lower level of education and a weaker position in the labor market. As a result, there is a higher chance of debt problems and payment arrears. 

The AFM stated that approximately a quarter of the Dutch population is ethically diverse, and this share is expected to increase to 36 percent by 2050. The regulator, therefore, speaks of an essential demographic change and wants to contribute to awareness and the social dialogue around this issue with the survey. 

Another critical point for specifically first-generation Dutch immigrants is the often inadequate old-age provision resulting from a state pension shortfall. A large part of first-generation immigrants came to the Netherlands at a later age and, as a result, do not receive a full state pension. Moreover, they seem to make limited use of the Supplementary Income Provision for the Elderly (AIO), which supplements their income up to the social minimum. The AFM stated that approximately 40 percent of ethically diverse pensioners in the Netherlands with a non-Western background live below the poverty line.

In addition, ethically diverse Dutch with a non-Western background use bank accounts and invest less often. The language barrier is often a significant obstacle to accessing financial services. The Dutch financial system is also often experienced as complex because simple information about financial products is absent or difficult to find, said the AFM.

Therefore, the regulator believes that more attention should be paid to the financial vulnerability of Dutch people, particularly those with a non-Western background. More emphasis can be placed on financial self-reliance during the integration process. The AFM also stated that policymakers and supervisors should take more account of any adverse effects of legislation and regulations for this group and said that financial institutions should think about reducing the language barrier.