Partial old-age pension still going strong in Finland
According to statistics of the Finnish Centre for Pensions, nearly 21,000 new partial old-age pensions were paid out in Finland in 2023. The amount was one and a half times higher than the previously established amount, but 14,000 less than in 2022. The exceptional index development in 2022 encouraged people to retire early towards the end of the year.
“The phenomenon was repeated in 2023 but was clearly less pronounced than in 2022. The benefit from taking the pension early due to the favourable pension index was minor. It’s more likely that this pension benefit interests Finns now also for other reasons, possibly because of the weaker economic situation”, explains Development Manager Jari Kannisto from the Finnish Centre for Pensions.
Each year, more than one tenth of the 61-year-olds entitled to the partial old-age pension takes out the benefit. In 2023, 15 per cent of those born in 1962 selected to do so.
The popularity of the partial old-age pension has remained strong also in 2024.
“Pension providers have received a nearly record-high number of claims so far this year. Already in April, the total number of partial old-age pension recipients exceeded 60,000”, Kannisto says.
An ample third cuts down on working hours
Kannisto depicts the partial old-age pension as a benefit for ordinary Finns.
“Most of them are working and have a working career in the private sector. Men are keener to claim the partial old-age pension than are women.”
The partial old-age pension is a flexible pension benefit that does not limit working. In 2023, more than 80 per cent of the recipients of the partial old-age pension were working before taking out the pension. Of these who were working before taking out the pension, 90 per cent were still working at the end of 2023.
Nevertheless, the average earnings of those who selected to take out the pension fell somewhat and was under the average earnings of those of the same age who continued to work.
“The wage data indicates that an ample third of those who take out a partial old-age pension cut down on their working hours. This pension benefit provides the opportunity to ease the burden of the last years of work. At the same time, it helps people adjust to full retirement”, Kannisto says.
Average monthly partial old-age pension in Finland in 2023 was €853
The partial old-age pension recipient can select to take out a quarter or half of their accrued earnings-related pension.
At the end of 2023, four out of five partial old-age pensions were paid at a 50-per-cent level and amounted to an average of 853 euros per month. The median pension was 763 euros per month.
“At the turn of the year, the pension was increased with the pension index by 5.7 per cent. After that, the average 50-per-cent partial old-age pension was around 900 euros per month.”
Partial old-age pension
- replaced the part-time pension in the 2017 pension reform;
- offers the possibility of persons aged 61 or more to take out 25% or 50% of the pension they have earned so far;
- permanently reduces the pension by 0.4% for each month that the pension is taken out early, before reaching the retirement age;
- can be taken out late, after reaching the retirement age, which means that the pension is increased by an increment for late retirement of 0.4 per cent for each month that the pension is taken out late;
- no restrictions as to how much you can work or earn; and
- can be drawn by persons who are unemployed or working.
Read more:
- Osittainen varhennettu vanhuuseläke ja työuraeläke. Uudet eläkelajit 2022 [partial old-age pension and the years-of-service pension: new pension benefits in 2022]. Finnish Centre for Pensions, Statistics 04/2024 (Julkari.fi)
- Estimate how much your partial old-age pension would be (Työeläke.fi)
- New pension benefis and pension reform (Etk.fi)
