The value of Finland’s investable earnings-related pension assets reached €272bn at the end of June 2025, up €2bn in the second quarter, according to the Finnish Pension Alliance (TELA).

For the first half of the year, pension assets delivered a 1.3 per cent nominal return and a 1.2 per cent real return when adjusted for inflation.

This marks a "significant" recovery from Q1, when Finnish earnings-related pension assets fell by €1bn, ending March with €270bn in assets under management.

In Q2, the overall asset allocation remained largely unchanged, with equities accounting for just under half of total holdings, fixed income comprising around a third, and the remainder allocated to real estate and alternative investments.

“Tensions in geopolitics and trade rattled the development of investment markets during the year," explained Tela chief economist, Mikko Mäkinen.

"The stock markets took a hit in April when the US announced high tariffs. However, the markets quickly recovered from the dip, and the share of equity and fixed-interest investments grew slightly during the quarter,” he noted.

Mäkinen added that the depreciation of the US dollar weighed on euro-denominated results: “This decreases investment returns reported in euros. Factors pushing the value of the dollar down are uncertainty about American trade policy and concerns about the burgeoning federal budget deficit.”

By contrast, the Helsinki stock exchange performed strongly in the first half of the year.

“In Q2, the pension providers slightly increased their investments in Finland.

"The share of their Finnish investments was 19 per cent at the end of June, which translates to €52bn,” the chief economist said.

Despite the rebound, TELA underlined that the system’s long-term financing rested on contributions as much as on investment returns.

Indeed, roughly three-quarters of Finnish pension expenditure is covered directly by contributions from employers and employees, with investment income funding the rest.

“We mustn’t forget how important salaries are in financing pensions. In addition to being a key factor in the earnings-related pension system, they are significant for the public finances,” Mäkinen stressed.

The update comes as Finland prepares for budget negotiations next week, with the government expected to prioritise measures to strengthen public finances and reduce borrowing.

“The long-term growth prospects of the Finnish economy are beleaguered by weak productivity and the shrinkage of the working-age population," warned Mäkinen.

"For Prime Minister Orpo and his government, a top priority at the budget negotiations should be investing in the components of economic growth, such as research and development (R&D), raising the level of education, and immigration for work and study.

"Slowing down public borrowing requires economic growth, too,” he added.

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