Early retirement is particularly popular in Norway, where one third of those who have a right to take out an old-age pension do it early. Nine out of ten draw the pension in full as soon as it is possible. In Sweden, early retirement is popular because retired people have a right to get various discounts.
The partial old-age pension that came into effect in Finland at the beginning of this year has become a hit. By the end of September, 11,000 persons had applied for the pension and 9,400 persons had already began drawing their partial old-age pension.
Corresponding pensions were established in Sweden and Norway already years ago. Unlike in Finland, it is possible to draw the full pension early, before reaching the retirement age, in both of our neighbouring countries.
Norwegian men particularly keen to retire early
At the end of 2015, nearly one third of the Norwegians aged between 62 and 66 years drew their pension early. Men in particular were actively using the option to retire early. Also in Finland, the majority of those who get a part-time pension have been men.
”Although we have other alternatives, men seem to take out 100 per cent of their pensions as soon as it is possible. Perhaps they think they are going to live for a shorter time than the women,” says Mika Vidlund, Development Manager at the Finnish Centre for Pensions.
Once the Norwegians have taken out their pension, they continue working as before. According to statistics of the Finnish Centre for Pensions, the Finns appear to do the same.
Swedes attracted by retiree status
In Sweden, the initial enthusiasm towards the early old-age pension has waned.
At the end of 2015, every fifth Swede aged 61-64 years had taken up an early old-age pension. The gender difference is not pronounced in Sweden.
Taxation may be another reason for the pension’s popularity in Finland and Norway. In Sweden, taxation is stricter and the reasons for taking up early retirement are partly different there.
“In Sweden, it is common for people to draw the minimum pension amount that will give them the status of a pensioner. That way they are entitled to, for example, discounts in public transportation fees in Stockholm,” Vidlund explains.
In Sweden, the partial old-age pension is often re-invested in, for example, various savings policies that improve the survivors’ benefits paid out of the earnings-related pension system.
The data stems from a report of the Finnish Centre for Pensions that compares the flexible retirement ages in three of the Nordic countries.
Mika Vidlund, Liaison Manager, Finnish Centre for Pensions
Phone +358 50 377 8140, mika.vidlund(at)etk.fi