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As retirement ages are rising, concerns have been raised about the feasibility and social fairness of extending the working lives of those who already have long careers of demanding work. This is the theme at the webinar of the Finnish Centre for Pensions on Tuesday 14 January 2025. The webinar is in English.

Raising the retirement age has significantly delayed retirement. This has, among other things, raised the employment rate of 63-year-olds to nearly 60 per cent. Before the 2017 pension reform, only 34 per cent of people over 63 were in work.

The development of working lives seems moderate when examined with a new indicator from the Finnish Centre for Pensions based on the relationship between the expected duration of active working life and life expectancy. The calculation of the labour years ratio was decided in connection with the 2017 pension reform.

The earnings-related pension index will increase pensions by 1.31 per cent at the turn of the year. The wage coefficient will increase by 2.19 per cent. The index adjustments have been exceptionally large in the past two years. We are now returning to a period of moderate increases.

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Around 35,000 persons residing abroad receive an earnings-related pension from Finland. The number of earnings-related pension recipients residing abroad has remained constant for a long period, but there have been changes for some countries. The number of recipients residing in Sweden falls steadily while the number of recipients in Estonia grows rapidly.

There is substantial variation accross Europe regarding pensioners’ subjective economic hardship. A recent research article shows that Finland is among the countries where subjective economic hardship is relatively rare and less frequent among the over-64-year-olds than among other age groups.

The time of exceptional indexes is over. The Finnish Centre for Pensions estimates that the 2025 earnings-related pension index will grow less than the wage coefficient. As a result, a person who retires on an earnings-related pension in 2025 may receive a slightly higher index increment to their pension than a person who retires in 2024.

Retirement on a disability pension has decreased clearly among people aged between 50 and 60 years. This is evident when examining the development by successive age cohorts. A study by the Finnish Centre for Pensions shows that full disability retirement has decreased over a longer period of time. At the same time, retirement on a partial disability pension has also decreased as of the cohorts born in the early 1960s.

Educational expansion has improved labour force participation of over-55-year-olds in the last decades. Particularly women’s education level has increased rapidly. Labour force participation of low-educated people has increased at a lower pace in several Member States of the European Union. This is evident from a fresh research article by the Finnish Centre for Pensions.