According to statistics of the Finnish Centre for Pensions, people in Finland retired on an old-age pension at age 61.2 years on average in 2017. This is about one month later than in 2016. The number of new retirees was 75,000 persons, of whom three out of four retired on an old-age pension.
The average effective retirement age has risen by 2.4 years since the beginning of the century. The goal is for the average effective retirement age to be 62.4 years by 2025. To reach that goal, the effective retirement age would have to rise by an ample 10 per cent each year.
The effective retirement age is expected to rise more next year as the effects of the 2017 pension reform will begin to show.
As of the beginning of 2018, the retirement age rose by three months. The retirement age will rise by three months per year until 2027, when it is 65 years. After that, the retirement age will be linked to the average expected life expectancy.
“People have been able to retire at 63 for a long time, and it has also been the most popular age for retirement . Now that the retirement age starts to rise, the effective retirement age is also likely to rise,” says Jari Kannisto, development manager at the Finnish Centre for Pensions.
In 2017, 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 statistical year.
Number of new retirees on a disability pension stabilised
In 2017, about 75,000 people retired on an earnings-related pension. This was slightly fewer than in 2016. Three out of four, or 57,000 persons, retired on an old-age pension. The number is equal to that in 2016.
In the last few years, the number of people retiring on a disability pension has stabilised at slightly below 19,000 persons. At the same time, an increasing share of them retire on a partial disability pension.
Employment rate of the elderly keeps rising
According to Statistics Finland, the employment rates of the elderly have risen. Among the 55-59-year-olds, it is already as high as 76 per cent, and among the 60-64-year-olds, roughly 49 per cent. The employment rates in both age groups have risen by 10 percentage points in an ample decade.
“In recent years, the employment rate of individuals aged 60 and above, in particular, has increased briskly. The main underlying factors are the changes made to the unemployment path to retirement and the elimination of many early retirement routes. The employment rate has risen also because part-time working has become more common,” Kannisto explains.
Jari Kannisto, Development Manager, phone +358 29 411 2232, +358 50 368 7559, jari.kannisto(at)etk.fi
Three facts about retirement on an earnings-related pension in 2017:
- The average effective retirement age was 61.2 years.
- About 75,000 persons retired on an earnings-related pension.
- More than 1.4 million people get a pension based on their own working life.
Expected effective retirement age:
- depicts the average effective retirement age if the retirement and mortality rates remain on the level of the statistical year,
- is independent of the demographic age structure and is calculated under the same principles as the expected life expectancy that measures life span, and
- measures the development of the effective retirement age of the 25- and the 50-year-olds.
Reaching the goal requires that the effective retirement age rises steadily by 0.15 years per year.
The effective retirement age has risen particularly because the unemployment pension has been abolished and the number of disability pension retirees has gone down. In the future, the rising retirement age will also raise the effective retirement age.