A third of Finns in receipt of partial old-age pension are not working
Written by Natalie Tuck
A third of Finnish people who are in receipt of a partial old age pension are not working, according to data released by the Finnish Centre for Pensions.
The partial old-age pension, is a new type of pension introduce in Finland at the beginning of 2017 and by the end of May, a total of 5,466 persons were in receipt of a partial old-age pension. A survey by the Finnish Centre for Pensions found that a third in receipt are not working.
The respondents stated that they applied for the partial old-age pension mainly because they felt uncertain about how long they will live and how healthy they will be. Many of them also point out that the partial old-age pension eases their tight economic situation or provides them with extra spending money. The unemployed, in particular, state their economic situation to be the reason why they applied for the partial old-age pension.
Of the wage earners and self-employed who have taken out a partial old-age pension, as many as 60 per cent say they have continued working as before. Correspondingly, 40 per cent use the partial pension to ease their work load and 30 per cent have reduced their working hours. The self-employed tend to do this more often than the wage earners; roughly 10 per cent state that they have stopped working altogether.
Slightly less than half of the new retirees on a partial old-age pension are wage earners. Nearly one quarter are self-employed or farmers. More men than women have applied for a partial old-age pension: 60 per cent of those who have applied for a partial old-age pension are men.
The majority of the applicants have retired early on a partial old-age pension. Finnish Centre for Pensions senior researcher Noora Järnefelt said there is a misconception that the new pension type offer money at no cost.
“If you take out an early partial old-age pension, you pay for it later in the form of a smaller final monthly pension. The early pension can be seen as a loan that you have to pay back later in retirement.”
According to Järnefelt, the results show that many of those who get the partial old-age pension value the current and near-future increase in income more than their final old-age pension.