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More Finns working until the age of 65

Pension reform in Finland may have raised the official eligibility age for old-age pensions, but more individuals appear to be voluntarily staying in their jobs past retirement age anyway.

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Image: Yle Uutisgrafiikka

The retirement age in Finland has been increasing gradually since the turn of the century. It is currently not unusual for workers to continue in their jobs until they are 65.

"The employment rate for people aged 60 to 64 has risen nicely. The fifty percent mark will probably be surpassed yet this year," says Tiina Palotie-Heino, head of statistics for the Finnish Centre for Pensions.

People's choice to work longer has been affected by legal changes that have raised the eligibility age for old-age pension and made it harder to qualify for disability pensions. Palotie-Heino says both policy changes and evolving attitudes are behind the trend.

"Certain paths to early retirement are no longer available, and this has had a noticeable effect. It hasn't been possible to retire with a disability pension since 2012," she says.

Today's young people will be almost 70 at retirement

The 2017 pension reform in Finland increased the earliest eligibility age for old-age pension by three months per year until the year 2027, starting with the 1955 birth cohort.

Already this year, it is possible to retire at the age of 63 years and three months, but if you want a full pension, you will have to stick with the job another eight months.

For people born after 1964, retirement age will be linked to life expectancy in future. For example, people born in 1970 will be eligible to retire one month short of their 66th birthday, while people born in 1995 will have to wait until they are over 68 years old to retire.

More people want to continue work than take early retirement

A survey carried out by the Finnish Centre for Pensions shortly after the reform was passed into law in Finland showed that critique of the rise in retirement age died down quickly once the law came into effect.

"About half of the respondents predicted that they would retire when they became legally eligible, but there were many who were planning to continue to work past that point," Palotie-Heino says.

The survey found that the number of people who planned to work past their retirement age was actually greater than the number of respondents who expected to take advantage of early retirement.

"There are many kinds of jobs: some people enjoy their work, while others feel they are being pushed away. But nowadays people are talking a lot more about the importance of the quality of working life and how important it is to invest in it," says Palotie-Heino.

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