Key changes to earnings-related pensions in 2025
A new age group, born in 1961, will reach its lowest retirement age as of late 2025. The partial old-age pension can be granted at age 62. Earnings-related pensions will increase by more than 1 per cent. We will get more detailed information about the upcoming pension reform.
A new age group reaches its retirement age
In the first half of 2025, individuals born between June and December 1960 will reach their retirement age of 64 years and 6 months. Later in the year, those born in 1961 will reach their retirement age of 64 years and 9 months. For example, a person born in January 1961 can retire on an old-age pension as of 1 November 2025.
In the first half of 2025, individuals born between June and December 1960 will reach their retirement age of 64 years and 6 months. Later in the year, those born in 1961 will reach their retirement age of 64 years and 9 months. For example, a person born in January 1961 can retire on an old-age pension as of 1 November 2025.
Old-age pension: Birth year determines retirement age (Tyoelake.fi)
The qualifying age for the partial old-age pension rises
Previously, the qualifying age for the partial old-age pension was 61 years. Starting from 2025, this age will rise to 62 years.
The partial old-age pension can begin as early as 61 years for individuals born in 1963 or earlier. For those born in 1964, it begins at 62 years.
Flexible partial old-age pension (Tyoelake.fi)
Earnings-related pensions increase by more than 1 per cent
The earnings-related pension index raises earnings-related pensions in payment with around 1.32 per cent in 2025. The increase applies to all earnings-related pensions, that is, the old-age pension, the partial old-age pension, the disability pension and the temporary disability pension (also known as the cash rehabilitation allowance), the survivors’ pension (surviving spouse’s pension and orphan’s pension), the years-of-service pension and the vocational rehabilitation allowance.
For example, if you have received a monthly earnings-related pension of 1,850 euros in 2024, you will get a monthly pension of 1,874.37 euros in 2025.
The accrued earnings-related pension is adjusted with the wage coefficient. At the time of retirement, the wage coefficient adjusts career lifetime earnings to the level of the year in which the pension begins. In 2025, the increase is around 2.19 per cent.
Indexes protect the pension amount (Tyoelake.fi)
The life expectancy coefficient reduces starting pensions by around 5.2 per cent
When an earnings-related pension begins, it is adjusted using the life expectancy coefficient, which is determined separately for each birth year at the age of 62.
For those born in 1963, the life expectancy coefficient for 2025 is set at 0.94759, resulting in a 5.2 per cent reduction in earnings-related old-age pensions starting that year. This is 0.1 per cent less than the reduction applied in 2024.
The estimated pension amounts on the pension record include the impact of the life expectancy coefficient. This reduction can be mitigated by choosing to start the pension at a later date.
Life expectancy coefficient (Tyoelake.fi)
Transitional period for pension accumulation rate coming to an end
In the 2017 pension reform, a transitional period was established during which earnings-related pensions for individuals aged 53 to 62 would accumulate at a rate of 1.7% of their annual income. This transitional period began in 2017 and will end in late 2025. For other age groups, earnings-related pensions have accumulated at a rate of 1.5% of annual earnings from age 17 (age 18 for the self-employed) until the insurance obligation ends. Starting in 2026, the accumulation rate for earnings-related pensions will be 1.5% for all insured individuals, regardless of age.
The end of the transition period in late 2025 will also impact the TyEL insurance contribution paid by employees and the YEL contribution paid by the self-employed. During the transition period, individuals receiving higher accumulation rates have paid higher contributions. From the beginning of 2026, the contribution rates for both employees and self-employed individuals will be standardized, regardless of the insured person’s age.
Earnings-related pensions are paid abroad as before
As of 1 February, Kela will cease to pay old-age and disability pensions to pensioners living abroad in other EU and EEA countries, Switzerland, and the UK.
This change does not affect the payment of earnings-related pensions abroad. Earnings-related pensions will continue to be paid abroad as before.
Adjustments to YEL income continue
According to the legislative amendment that came into effect in 2023, the earnings-related pension provider adjusts YEL earnings every three years. These adjustments are made unless the self-employed person’s income has been adjusted for another reason within the last three calendar years.
The amendments will be implemented gradually for the first time between 2023 and 2025. In 2025, adjustments will be applied to YEL incomes exceeding 25,000 euros as well as to other YEL incomes that have not been adjusted on other grounds within the last three calendar years.
What is YEL income (Tyokelake.fi)
Further details about the upcoming pension reform
The Finnish Government and labour market organisations are considering measures to reform the country’s earnings-related pension scheme. Challenges such as falling birth rates, a deteriorating dependency ratio, and weak economic growth have put financial pressure on the pension system. To address these issues, two working groups with representatives from social partners, the Ministry of Social Affairs and Health, and the Ministry of Finance have been established to prepare the necessary changes.
The Government aims to finalise the concrete changes to the earnings-related pension scheme by the end of January 2025.
Pension reform preparations 2023–2025
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