According to statistics of the Finnish Centre for Pensions, the effective retirement age rose significantly in 2014. On average, the Finns retired on an earnings-related pension at age 61.2 years. The equivalent figure in 2013 was 60.9 years.
The main cause behind the rising effective retirement age was a decrease in the number of starting disability pensions.
The number of new retirees on a disability pension fell from 2013 by eight per cent. As of 2008, it has decreased by 25 per cent. In 2014, for the first time in the 2000s, the number was less than 20,000 persons.
“The number of new retirees on a disability pension has decreased surprisingly much. The life expectancy of Finnish citizens has been extended, and an increasing number of persons reach the old-age retirement age in good health. Workplaces and attitudes have also changed,” explains Jari Kannisto, Development Manager at the Finnish Centre for Pensions.
The abolishment of the early old-age pension also led to a rise in the effective retirement age. This pension type is no longer granted to persons born in 1952 or later.
Mikko Kautto, Director at the Finnish Centre for Pensions, finds that the development relating to disability pensions enhances the chances of reaching the goals set for extending working lives.
“We need the pension reform agreed on in the autumn so that retirement on an old-age pension will also be postponed. 63 years continues to be the most popular age at which to retire on an old-age pension.”
In 2014, the expected effective retirement age for 25-year-olds was 61.2 years and for 50-year-olds 62.8 years. The expected effective retirement age depicts the average retirement age if the retirement and mortality rates remain on the level of the review year.
Earnings-related pension paid to 70,000 new retirees
Last year, approximately 70,000 persons retired on an earnings-related pension. This is over 3,000 persons less than in 2013. The number of new retirees on a partial pension also de-creased.
“The majority, more than 70 per cent, of persons retiring on an earnings-related pension re-tired directly on an old-age pension. The proportion of persons retiring on an old-age pension has grown pronouncedly in the last few years. For example, in 2008, less than half of the new retirees retired on an old-age pension,” Kannisto explains.
The rise of the employment rate of the elderly is also noteworthy. In slightly more than a decade, the employment rate of persons aged 55 or above has risen by 10 percentage points to around 60 per cent.
“Despite the economic situation, the employment rate of the elderly has developed favourably. In recent years, the employment rate of individuals aged 60 and above, in particular, has increased briskly,” Kannisto assesses.
Mikko Kautto, Director, tel. +358 29 411 2185, +358 40 740 8095, first-name.lastname(at)etk.fi
Jari Kannisto, Development Manager, tel. +358 29 411 2232, +358 50 368 7559, firstname.lastname(at)etk.fi