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At year-end 2022, every fifth under-68-year-old pensioner worked. That means 70,000 persons, of whom 40,000 were drawing an old-age pension. At year-end 2022, there were a total of 380,000 earnings-related pension recipients under the age of 68 years in Finland. The data stems from recent statistics of the Finnish Centre for Pensions.

Working is most common among those who receive a partial disability pension: as many as 80 per cent of them worked at year-end 2022. The corresponding share of working old-age pension recipients aged under 68 years was 15 per cent. 

“The purpose of the partial disability pension is to support the working of people with a partial ability to work. It appears successful as most of them continue working”, says Development Manager Jari Kannisto (Finnish Centre for Pensions).

A clear majority of those receiving a partial old-age pension stay in the labour market. At the end of 2022, three out of four of the recipients of this pension benefit continued working.  

“It’s natural to continue working while drawing a partial old-age pension. On average, these pensions are very small and do not alone guarantee an adequate or reasonable income”.

Working pensioners receive large pensions

Those who work while receiving an old-age pension get the highest total income. Their average pensions are larger than those of other pensioners, and on top of their pensions, they receive additional income from work. According to the statistics of the Finnish Centre for Pensions, working retired men’s average combined monthly income from work and old-age pension in December 2022 rose to more than 5,000 euros. Women’s average income was around 3,500 euros.  

“The higher-than-average old-age pensions of working pensioners indicates that for them, the incentive to work is not primarily financial”, Kannisto estimates.

Although the earnings-related pension of working old-age pensioners is reasonably high on average, it is low for some. 

In December 2022, the earnings-related pension of 7 per cent of working old-age pensioners received a pension that was below the limit for the guarantee pension. Two out of three pf them were women.

Pensioners’ work is often irregular or part-time

Working while drawing a pension has increased steadily already for a long time. Part of the increase can be explained by the growing number of persons drawing a partial disability pension while part of it stems from the fact that working while drawing an old-age pension has become more common.  

Drawing a partial old-age pension has also raised the number of working pension recipients considerably as of 2017 although persons receiving a partial old-age pension are not counted as pensioners as such. 

“Pensioners often work sporadically or part-time. For example, the average earnings from work of persons receiving an old-age pension are of the same level as their average pension, which indicates a clear drop in the earnings level from the level before retirement”, Kannisto concludes.

The temporary nature of work done while drawing a pension is also reflected in the variation in the number of persons working over the year. When slightly less than 110,000 persons who received a pension and were under 68 years of age worked in December 2022, they numbered nearly 150,000 over the entire year.

Working in retirement raises the employment rate

As working among those of a pensionable age and those who have retired becomes more common, the employment rate among older people rises.  

For example, in the age group 65–69-year-olds, half of the employment rate in 2022 can be contributed to working pensioners. In addition, around 2,400 persons in this age group worked while receiving a partial old-age pension in December 2022. Correspondingly, every tenth person in the age group 60–64-years who were working was a pension recipient. If the recipients of a partial old-age pension were considered as pensioners, the share of pension recipients in this age group would rise to 16 per cent.  According to the recent study by the Finnish Centre for Pensions, half of those who have recently retired from work on an old-age pension are interested in working while drawing a pension.

Finnish Centre for Pensions – Central body of and expert on statutory earnings-related pensions