Finnish workers plan to work longer & retire later, study finds | Yle Uutiset | #retirement | #elderly | #seniors
An increasing number of workers in Finland are planning to defer their retirement, with more than half saying they will work until age 65 and beyond, according to the results of a study by the Finnish Centre for Pensions (ETK).
In 2018, the average intended retirement age was 64 years and 7 months, an increase of nearly two years from the average of 62 years and 8 months found in a similar study in 2008.
ETK economist Satu Nivalainen said in the report that she considers this change to be “significant”, adding that the results reveal that workers in Finland have largely accepted working for longer. The average intended age of retirement is rising in line with the age at which workers can begin receiving their full pension, the report further noted.
The study results show the success of the 2017 pension reform, ETK said, when Finland began implementing a gradual rise in the official retirement age by three months per year, from 63 years to 65 years.
“Extending working lives has been a central socio-political goal in Finland for the last twenty years. If future retirees adjust their retirement behaviour according to an old-age retirement age that is higher than that of previous generations, the basis of the pension system’s financial sustainability remains more solid. When assessed from this point of view, the 2017 pension reform seems quite successful,” Nivalainen said in the press release.
Retirement changes may lead to more income inequality
The study also found that the most popular age to retire is now 65 years, with one third of survey respondents saying that they intended to retire at that age, while one fifth revealed they intend to retire at age 66, at the earliest.
ETK concluded that a worker’s intentions about retirement are strongly influenced by the changes brought about by the 2017 pension reform.
“Finns have clearly taken in that the old-age retirement age is now determined based on one’s year of birth. Each age group has its own old-age retirement age and target retirement age,” Nivalainen said.
Having a weaker capacity to work and a history of long sick leave absences increased the chances that a worker would choose to retire earlier, the survey also found, which Nivalainen pointed out may lead to an increase in income inequality.
“When the old-age retirement age continues to rise, the inequality between wage earners with a good work ability and those lacking it grows. This may impact pension levels, among other things. We know from previous studies that those who are in poor health actually retire at an earlier age than intended, and those with a good work ability even at a later age than intended,” she said.
ETK’s study was based on Statistics Finland’s Quality of Worklife Surveys carried out between 2008 and 2018. The dataset for each year contains the information of around 1,300 people. The interviewees were wage earners aged between 50 and 62 years at the time of the interviews.