Pension Barometer: Two thirds of Finns trust the pension system
Finnish citizens' trust in the pension system remains high, according to the Pension Barometer conducted by the Finnish Centre for Pensions. Yet, the confidence has decreased somewhat compared to previous Pension Barometers. Two thirds of the respondents trust the pension system and almost as many think pension assets are managed in a responsible way.
In this year’s Pension Barometer, 66 per cent of Finns trust the pension system, which is six percentage points less than in the previous year. Almost 50 per cent of the respondents said they believe that it will still be possible to pay out pensions in the future. In the previous poll, the number of respondents who believed it will still be possible to pay out pensions in the future was slightly higher, around 55 per cent. Furthermore, about half of the respondents think younger generations have to pick up an unreasonably big share of the pension tab.
“A broader sense of insecurity about the future and the economic development, rising prices and interest rates as well as the fluctuations of the financial market are all probably reflected in how people trust the pension system”, says economist Sanna Tenhunen (Finnish Centre for Pensions).
The decreasing trust does not seem to be reflected in the respondent’s anticipation of their own personal economic security during retirement. Almost 60 per cent of Finns predict that they will have a reasonable standard of living in retirement, which corresponds to the results from the poll one year ago.
About half of the Finns feel informed about pensions
Slightly less than half (45%) of the respondents said they feel they have good or relatively good knowledge about pensions. On the other hand, around one third (30%) responded that their knowledge of pensions is either poor or fairly poor. These ratios do not diverge from last year’s poll.
When the poll tested for basic knowledge of pensions by having participants rate statements as ‘true’ or ‘false’, the best known fact was that if someone’s earnings related pension is very low, it is supplemented with the national or the guarantee pension. Around two out of three respondents knew that the retirement age is not the same for all. Still, almost one third believe otherwise.
An ample 60 per cent of Finns know that the majority of paid pension contributions are used to finance current pensions in payment. Nearly every third respondent believes that this is not the case.
Increment for deferred retirement relatively unknown
The effect of late retirement on the pension amount is least well known. Around one half of the respondents know that if they start drawing their pension after reaching their retirement age, their pension is permanently increased with an increment for late retirement. Slightly more than every third believe this statement is false.
“Although most respondents know the basic principles of the pension system, many have misconceptions or lack necessary information. Ideally, as many as possible should know that retiring late improves their earnings-related pension. That way, everyone could make an informed decision on when to retire”, says Tenhunen.
Finns positive about the principles of pensions
The Pension Barometer also measured the attitudes of Finns towards the central principles of pension insurance. Most (80%) are positive towards the fact that people with higher earnings pay higher pension contributions measured in euros.
Almost as many are positive towards the fact that those who pay a higher pension contribution also receive a higher pension and that everyone automatically belongs to the same pension system.
The survey was conducted in May 2023 by Kantar Public. The respondents numbered 1,000 Finnish citizens aged 18–79 years.