List of topical issues
13.7.2021

Every second Finn supports increasing employment-based immigration if our pension system is to be amended due to its financing. The Finns strongly oppose pension cuts. This is evident in the latest Pension Barometer conducted by the Finnish Centre for Pensions.

Finns reject pension cuts. Nearly all population groups are set against cutting current or future pensions to strengthen pension financing. 

The most popular solution to the problem would be increasing employment-based immigration. This alternative is supported in full or to some degree by 52 per cent of the respondents to the survey. However, increasing employment-based immigration strongly polarizes Finns: 30 per cent of the respondents oppose it. 

The highly educated, upper-level office workers, students, residents in the capital region and the supporters of the Green Party take a positive stance towards employment-based immigration. Low-skilled Finns and supporters of the Finns Party oppose employment-based immigration more often than others. 

The degree of support for the following measures to strengthen pension financing if required:
Increasing employment-based immigration to improve the employment rate, 52 per cent agree or strongly agree, 30% disagree or strongly disagree. Raising pension contribution paid by employees and employers: 39 per cent agree or strongly agree, 38 per cent disagree or strongly disagree. Raising the retirement age: 29 per cent agree or strongly agree, 57 per cent disagree or strongly disagree. Cutting the pensions of future retirees: 8 per cent agree or strongly agree, 79 per cent disagree or strongly disagree. Cutting the pensions of current retirees: 7 per cent agree or strongly agree, 88 per cent disagree or strongly disagree.

Finns also see employment-based immigration as the best alternative to strengthen pension financing. An ample one third (37%) is of this opinion. 

Raising pension contributions polarises 

Decreasing birth rates and an ageing population will increase the pressure to reform pension financing in the future.  

“If the volume of the working-age population increases as a result of, for example, an increase in employment-based immigration, the number of pension contribution payers grows and the pressure on pension financing decreases. Other alternatives to stabilise pension financing includes raising either the pension contributions or the retirement age,” explains economist Sanna Tenhunen (Finnish Centre for Pensions).  

Raising the pension contributions of employees and employers is the second most popular solution to strenghten pension financing. Of the respondents, 39% agree or strongly agree to raising pension contributions. However, the majority still oppose raising pension contributions. Around 30% see this as the best way to improve pension financing. 

The self-employed are more critical about raising contribution rates. Nearly every second self-employed person is against this means. The supporters of the Left Alliance and the Finnish Social Democratic Party support this alternative more frequently than do others. Raising the pension contribution rate is the best alternative according to the supports of the Finns Party and the Left Alliance. 

Roughly 29 per cent would accept raising the retirement age. Only 13 per cent finds this to be the best alternative to strengthen pension financing. 

No easy solutions, yet trust in pension system remains strong 

Director Jaakko Kiander (Finnish Centre for Pensions) predicts that we are heading towards a difficult discussion on pension financing.  

“We have no easy solutions.” Cutting benefits is not seen as an option; raising contributions is not popular. A tight majority supports increasing employment-related immigration, but it is also opposed by a considerable amount of respondents. In addition, the international competition of skilled workers is tough. Many other western countries want to increase employment-related immigration, as well. 

Nevertheless, the basis for strengthening pension financing is good. The Finns continue to trust the pension system. Nearly three out of four trust the pension system fully or to some extent. 

“This may be explained partly by the fact that our system weathered the corona pandemic so well,” Kiander ponders.

Views on the statement ”I trust the Finnish pension system” in 2017-2021. In 2017: 59 per cent agree or strongly agree, 25 per cent disagree or strongly disagree. In 2018: 60 per cent agree or strongly agree, 23 per cent disagree or strongly disagree. In 2019: 67 per cent agree or strongly agree, 22 per cent disagree or strongly disagree. In 2020: 74 per cent agree or strongly agree, 15 per cent disagree or strongly disagree. In 2021: 71 per cent agree or strongly agree, 18 per cent disagree or strongly disagree.

According to the Pension Barometer, Covid-19 has not affected how the majority of Finns view the country’s pension system. Four out of five estimate that the economic challenges resulting from the pandemic have not reduced their trust in the pension system. The self-employed, low income people and students have faced financial struggles the most. 

The Pension Barometer of the Finnish Centre for Pensions was conducted by Kantar TNS Oy. The interviews were conducted by phone in May 2021 with 1,003 respondents (Finnish citizens) aged between 18 and 79 years. The margin of error is around three percentage points.  

Each year, the questionnaire survey measures how Finns relate to pensions and pension-related issues.