Topical issues

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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This year, Finland ranked seventh in the international Mercer CFA Institute Global Pension Index comparison. Finland dropped one notch compared to 2023. In the integrity sub-index, the Finnish pension system continues to outrank the others.

In the spring of 2024, the Finnish Centre for Pensions launched a mass superivison of wages that have been reported to the Incomes Register but lack pension insurance. Light entrepreneurs were placed under the microscope.

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.

The group of new disability pensioners includes an increasingly higher share of younger people whose income depends on the national pension or other social security benefits. At the same time, the partial disability pension has gained in popularity. For partial disability pensioners, income from work alongside the earnings-related pension is important. A total of 180,000 persons received a disability pension in Finland in 2023.