Economist Juha Rantala from the Finnish Centre for Pensions studies pensioners’ financial circumstances. He has conducted extensive research into changes in pensions and living standards and published several studies to support pension policy decisions. In his latest work, Rantala examines how total pensions – that is, earnings-related and national pensions – changed in Finland between 1995 and 2025. We asked Juha six questions about changes in pension provision.

Pensioners are often talked about in public debate as if they were all the same. What does your research show?

To put it simply, pensioners fall into three distinct groups. In Finland, we have a large and rapidly growing group of pensioners who’ve generally had long working careers. They receive only earnings-related pensions. Then there’s a smaller group whose income comes from both earnings-related pensions and pensions paid by Kela. They’ve often had fragmented careers in low-paid work. The third group is quite small: pensioners who’ve never been in paid employment. They rely entirely on a national pension or a guarantee pension.

I think it’s important to look at the roles of earnings-related and national pensions for each of these three groups. The groups differ in size, composition and pension levels. They’ve also changed significantly over the period I’ve studied.

The number of pensioners in Finland has grown substantially in recent decades. How have these three groups changed?

Over the past 30 years, the number of people receiving only an earnings-related pension has risen by almost a million. At the same time, the number receiving both an earnings-related pension and a pension paid by Kela has fallen by almost half a million, and the number receiving only a pension paid by Kela has fallen by around 70,000. You can also see these changes in each group’s share of Finland’s roughly 1.6 million pension recipients. The share receiving only an earnings-related pension has risen from 5 to 66 per cent, while the share receiving both an earnings-related pension and a pension paid by Kela has fallen from 82 to 28 per cent. The share receiving only a pension paid by Kela has fallen from 13 to 5 per cent.

The make-up of the pensioner population has also changed considerably. Pensioners are now older, with particularly large increases in the shares aged 75 and over and 85 and over. The number of disability pension recipients has also fallen sharply, especially among those over 50. As a result, pensions paid by Kela have become more important for disability pension recipients.

What sort of amounts are we talking about – how much have pensions increased?

The average total pension has risen by around 50 per cent in real terms over the past 30 years. Last year, it was almost €2,140 a month, compared with €1,460 a month 30 years earlier. But the average was higher in the largest group – those receiving only an earnings-related pension – at almost €2,600 a month last year. Pension increases in this group explain much of the rise in the overall average in real terms. Even so, pensions in this group have been growing much more slowly since the 2010s.

How have pensions changed in the smaller groups?

Last year, those receiving both an earnings-related pension and a pension from Kela had an average total pension of €1,300 a month – about half the average for those receiving only an earnings-related pension. The biggest factor behind pension trends in this group was the gradual phasing out of the basic component of the national pension. This brought down the average total pension until 2001. For those receiving only a pension from Kela, the average total pension has stayed much the same. Last year, it was €960 a month. The biggest change came in 2011, when the guarantee pension was introduced, boosting pension levels. 

You’ve also looked at how pensions have changed for new retirees. How do their pensions compare with those of other pensioners?

New retirees are an important group if we want to understand how pensions are changing. After all, a person’s pension is determined when they retire. Their pensions also give us an idea of future pension levels.

In 2025, the average total pension for new retirees was around €2,000 a month, a little below the average for all pension recipients. Until 2017, new retirees received a higher average total pension than pensioners overall. Since then, it’s been the other way round: new retirees have received less than the overall average. This may suggest that, among younger generations, total pensions are no longer rising from one generation to the next as they did in previous decades.

You’ve spent many years studying the financial circumstances of nearly 1.6 million Finns. What concerns you most about this group?

People often look at the average pension to judge whether pension provision is adequate. Earnings-related pensions are much higher than pensions paid by Kela, so they account for around 90 per cent of the average total pension. That makes earnings-related pensions the clear cornerstone of pension provision.

But around one in three pensioners receives a pension from Kela in addition to an earnings-related pension. If we focus too much on changes in the average pension, we risk overlooking how important Kela pensions are in providing an income for pensioners on low incomes. After all, the pension system aims not just to maintain a reasonable standard of living compared with life before retirement, but also to prevent poverty.

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Juha Rantala’s articles on the structure of pension provision and changes in total pensions feature in a new report from the Finnish Centre for Pensions. The report is the second in a three-part series. The first report, Paradigmatic pension reforms in international comparison, was published last year. The third, due in late 2026, will examine the structure of pension provision in selected countries.

Read more

The changing tiers of Finland’s pension system. Finnish Centre for Pensions, reports 9/2026 (Summary)  (Julkari.fi)
Paradigmatic pension reforms in international comparison. Finnish Centre for Pensions, reports 09/2025 (Summary) (Julkari.fi)
Research on pension adequacy (Etk.fi)