European Pension Comparison: Finland

Recently an article published in EWN highlighted the huge discrepancy between the average state pension in the UK compared to the Spanish equivalent. But how do they compare to other countries within Europe? Today EWN looks at Finland.

In Finland, eligibility for the national pension requires residency in the country for at least three years after turning 16. If individuals haven’t lived in Finland for at least 80 per cent of their time from age 16 to the start of the pension, the pension amount is adjusted accordingly. In addition, foreign pensions can influence the national pension amount​​.

Retirement Age In Finland

The retirement age in Finland’s national pension scheme is 65 years. However, in the earnings-related pension scheme, it varies based on the year of birth. As the retirement age in the earnings-related scheme reaches 65, the national pension scheme will adjust accordingly. This means the retirement age may change in the future as the earnings-related pension scheme’s age increases​​.

Average State Pension Amount In Finland

According to the Finnish Centre For Pensions, as of January 2023, a single retiree receives a full national pension of €732.67 per month, and a married or cohabiting retiree receives €654.13. These amounts are irrespective of gender.

However, having an earnings-related pension above a certain threshold can disqualify individuals from receiving the national pension​​.

Unique Policies About The State Pension In Finland

Finland’s state pension includes several unique benefits: the old-age pension, disability pension, survivors’ pension, and rehabilitation benefits. A significant addition is the guarantee pension, ensuring a minimum income level for pensioners.

Housing allowances, care allowances, and child increases are also available. Notably, military veterans receive extra supplements. An interesting aspect is that about half of all Finnish pensioners receive a national pension, influenced by legal changes and increased earnings-related pensions.

The scheme’s flexibility allows for early retirement options and postponement of pension with respective adjustments in the pension amount​​.

Finland’s Comparison With UK And Spain

Statistics produced in October by Almond Financial gave the following European comparisons, known as the European Pension Breakeven Index. The study looked at 30 countries, their average monthly pensions balanced against the average monthly living costs, based on the recipient being mortgage free.