The employment rate of 63-year-olds has nearly doubled
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.
Working after age 63 has increased significantly in Finland. This was a key goal of the 2017 pension reform.
The employment rate of those over 60 has risen in all age groups since 2017. The employment rate of 63-year-olds rose to nearly 60 per cent last year. Before the pension reform, it was 34 per cent. The rate has also increased for 64- and 65-year-olds. The employment rate of 64-year-olds rose above 40 per cent in 2023 (compared to 26 per cent in 2016).
“Pension statistics show a positive development. The essential question is whether Finns approaching retirement age continue working between the old and new retirement ages. This seems to be the case”, notes Jari Kannisto, Development Manager at the Finnish Centre for Pensions.
Before the retirement age was raised, the peak of retirement occurred at age 63. Now, for many age groups, this peak has shifted by three, six, and nine months, in line with the retirement age increase. For those born in 1958, the peak was exactly at age 64, and for those born in 1959, it has been at 64 years and 3 months.
In 2023, most people retired at age 64-65.
Graph “New retirees aged 60-68-years on an earnings-related pension” as an accessible Excel file.
Raising the retirement age reduces the number of people working only slightly
Raising the retirement age has delayed not only the transition to old-age pensions but also the exit from work.
”While the transition to old-age pensions has been delayed, most people have kept on working until the new retirement age”, Jari Kannisto says.
60 per cent of those born in 1954 stopped working within a year of reaching 63. However, only 7 per cent of those born in 1958 and 8 per cent of those born in 1959 stopped working within a year of reaching age 63.
”Roughly speaking, a three-month delay in the retirement age reduces the number of people working in that age group by just over one percentage point.”
Not everyone can work until the new retirement age
The increase in the retirement age has also meant that more people over 60 are moving to disability pensions.
”Some people may not be able to work until the new retirement age and may seek disability pensions before that. If the old-age retirement age is pushed too far away and people have problems with coping, they may apply for a disability pension several years before their retirement age”, Kannisto estimates.
The number of unemployed close to the retirement age has remained at the same level, and raising the retirement age for the old-age pension does not seem to have changed the situation.
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