New old-age pensions clearly higher than old ones

Earnings-related pension payments in 2017 came to 27 billion euros, one billion more than in 2016. The increase is explained by the growing number of pensioners and the size of new old-age pensions. The average pension of new old-age pensioners was almost 1,800 euros, with the mean around 1,600 euros.

In 2017 the average new earnings-related old-age pension was 1,784 euros a month. New retirees’ earnings-related pensions were around 250 euros higher than the average for all pensioners (€1,539).

In the past 10 years the average old-age pension has increased by 330 euros.

Among new retirees in 2017, men’s average old-age pension is more than 500 euros, or one-quarter higher than women’s. Men’s average pension was 2,047 euros, women’s 1,553 euros.

The gender difference increases to more than 600 euros when comparing current male (1,888€) and female (1,255€) pensioners.

“Gender differences in wages and in the length of work careers are more pronounced in older age groups than among those who retired in 2017. Furthermore, women live longer than men, which further widens the gap,” says Tiina Palotie-Heino, Statistics Manager at the Finnish Centre for Pensions.

Earnings-related pension expenditure up four per cent

In 2017 total earnings-related pension expenditure came to 27 billion euros, one billion more than in 2016. The major reasons driving the four per cent growth were the growing number of earnings-related pensioners and the size of new old-age pensions. On average new pensions were 600 euros higher than terminating pensions.

“The growth of pension expenditure was also impacted by the 0.6 per cent indexation of earnings-related pensions,” Palotie-Heino continues.

Old-age pensions accounted for 23.3 billion euros of total pension expenditure. The figure for disability pensions was 1.9 billion euros and for survivors’ pensions 1.7 billion euros.

Earnings-related pensioners now number nearly 1.5 million

At year-end 2017 a total of 1,485,000 persons received an earnings-related pension, an increase of 28,000 from the year before.

In 2017 just over 75,000 persons retired on an earnings-related pension, roughly the same number as in 2016. Three-quarters of these new retirees retired on an old-age pension. It is projected that the numbers retiring will fall somewhat in the future as baby boomers have for the most part now moved into retirement. Furthermore, the 2017 pension reform means that the retirement age will be progressively increased.

The number of people retiring on a disability pension was unchanged from 2016 at just under 19,000.

All pension figures reported here are gross values. The data are based on the Finnish Centre for Pensions pension register.

Earnings-related pension recipients in Finland, PDF publication

Statistics on earnings-related pension recipients in Finland on Etk.fi

More information:

Tiina Palotie-Heino, Statistics Manager, phone +358 29 411 2147, tiina.palotie-heino(at)etk.fi
Heidi Nyman, Statistics Planner, phone +358 029 411 2139, heidi.nyman(at)etk.fi

Photo: iStock