Statistics: Number of partial old-age pension recipients in Finland doubled in a few years
In 2024, 31,000 partial old-age pensions started. Partial old-age pensions are used both to ease the financial situation and to reduce the workload.
The interest of Finns in the partial old-age pension is growing year by year. According to the latest statistics from the Finnish Centre for Pensions, every third person born between 1959 and 1961 who is covered by the earnings-related pension scheme has already received a partial old-age pension.
The partial old-age pension was introduced in 2017. However, statistics show that it has only recently become popular with the public. In 2024, 31,000 partial old-age pensions were started, the second highest number on record and 10,000 more than the previous year.
”In addition, pension applications were spread evenly throughout the year. In 2022 and 2023, the partial old-age pension was particularly in demand towards the end of the year due to unusual index developments. Finns have now become familiar with the benefits of this pension option,” says Development Manager Jari Kannisto of the Finnish Centre for Pensions.
The weak economy is also likely to contribute to the growing popularity of the partial old-age pension.
”Rising unemployment, redundancies and the inflation of recent years. These factors are driving older people to seek additional income through the partial old-age pension. The need for money is increasing.”
Almost one third of people aged 61–68 received a partial old-age pension in 2024
The partial old-age pension is often taken immediately after reaching the age of 61, but its popularity varies in different regions of Finland. The further north you go, the more common the partial old-age pension becomes.
By the end of 2024, 71,000 partial old-age pensions had ended – the same number as those in effect at the end of 2024. Most of these pensions ended when the full old-age pension started. “The popularity of the partial old-age pension has grown rapidly. The number of people receiving a partial old-age pension is now more than double the number in 2021,” Kannisto notes.
Proportion of those reducing their working hours increasing
In 2024, almost 90 per cent of those who received a partial old-age pension were employed before receiving the pension. Of these employed persons, 90 per cent were still working at the end of 2024, which was also the case in previous years.
However, some of those who have taken the pension have reduced their working hours.
”Wage data suggest that almost half of those who opted for the partial pension reduced their working hours. The proportion of those reducing their working hours has increased significantly. Last year, the average earnings of those who opted for a partial old-age pension fell slightly below the average earnings of others of the same age who continued to work.”
The impact of the partial old-age pension on the length of Finnish working careers remains unclear. Nevertheless, it seems that one third of those who have opted for the partial old-age pension now continue to work beyond their retirement age.
The average monthly pension is 840 euros
Four out of five partial old-age pensions started last year were at the 50-per-cent level. The average pension was 840 euros a month.
However, Kannisto reminds people of the deduction for early withdrawal.
“Remember that you are eating into the bread of your later years. Last year, for example, the maximum early withdrawal period for the youngest age group was four years. This maximum period for early withdrawal meant a one-fifth reduction in the pension portion taken early. This reduction will permanently reduce the final pension.”
The partial old-age pension
- replaced the partial pension in the 2017 pension reform;
- gives a person who has turned 61 the possibility to take out a quarter (25%) or half (50%) of the old-age pension they have earned;
- permanently reduces the part of the pension that is taken out by 0.4% for each month that the pension is taken out early;
- can be drawn after reaching one’s retirement age, in which case the pension increases by 0.4% for each month that pension is taken out late;
- does not require tracking working hours or wages and can be granted to a person who is unemployed or working;
- can be drawn as of age 62 by persons born in 1964.
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