More and more employees in Finland plan to postpone retirement, and more than half say they will work until the age of 65. research Finnish Pension Center (ETK).
In 2018, the average planned retirement age was 64 years and 7 months, which is almost a two-year increase from the 62-year and 8-month averages of the corresponding 2008 study.
ETK economists Satu Nivalainen said in the report that he considered this change "significant"and added that the results reveal that in Finland, employees have largely accepted working for longer. The average projected retirement age will increase in line with the age at which employees can begin receiving a full pension, the report further found.
The research results show the success of the 2017 pension reform, ETK said when Finland began a gradual increase in the official retirement age by three months a year from 63 to 65 years.
"Prolonging working life has been a key socio-political goal in Finland for the past 20 years. If future retirees adjust their retirement behavior to older retirement ages that are higher than the ages of previous generations, the basis for the financial sustainability of the pension system will be more stable. From this perspective, the 2017 pension reform looks quite successful," Nivalainen said in a press release.
Pension changes can increase income disparities
The study also found that the most popular retirement age is now 65 years, and a third of respondents said they planned to retire at that age, while a fifth revealed their intention to retire at the earliest at age 66.
ETK noted that the employee’s intentions to retire are strongly affected by the changes caused by the 2017 pension reform.
"Finns have clearly taken into account that the retirement age is now determined on the basis of the year of birth. Each age group has its own retirement age and target retirement age," Nivalainen said.
Decreased work capacity and a history of long sick leave have increased the chances of an employee deciding to retire earlier. The study also found that Nivalainen pointed out that it may increase income disparities.
"As the retirement age continues to rise, inequality will increase among employees with good working capacity. This can affect, among other things, the level of pensions. From previous studies, we know that those in poor health retire at an earlier age than planned and those with good working capacity even later than planned." he said.
ETK’s survey was based on statistics on the quality of working life conducted by Statistics Finland between 2008 and 2018. Each year’s data contains data on about 1,300 people. The interviewees were wage earners aged 50โ62 at the time of the interviews.
Source: The Nordic Page