1. Pensions and pensioners’
economic welfare
1995–2015
Susan Kuivalainen, Juha Rantala, Kati Ahonen,
Kati Kuitto and Liisa-Maria Palomäki (eds.)

2. Most key indicators show improvement in
pensioners’ economic welfare in past 20 years.
Pensioners’ relative position has remained
unchanged vis-à-vis working population.
Economic welfare is weakest among disability
pensioners and pensioners living alone.
Pensioners do not have difficulties making ends
meet more often than overall population.

3. Comprehensive overview of
pensioners’ economic welfare
- level of pension income
- disposable income
- consumption and assets
- difficulties making ends meet
- international comparisons

4. Pensions now a significant source of income
4
800 000
1.4
million
1995
1.2
million
845 00060 000
1.1
million
All pensioners
Old-age pension
recipients
Earnings-related pension
recipients with no other
pension income
2015
FINNISH CENTRE FOR PENSIONS

5. How has pensioners’
economic welfare
developed over time?

6. 6FINNISH CENTRE FOR PENSIONS
Average overall pension up 36% in real terms
Average overall pension in 1995–2015, €/month at 2015 value
Source: Finnish Centre for Pensions and Social Insurance Institution joint statistics.
0
250
500
750
1 000
1 250
1 500
1 750
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
€/month
1 614 €
1 196 €

7. 7FINNISH CENTRE FOR PENSIONS
Average overall pension income remains at
around 50% of average earned income
Ratio of average overall pension to average earned income (%)
in 1995–2015
Source: Finnish Centre for Pensions and Social Insurance Institution joint statistics.
0
10
20
30
40
50
60
70
80
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
%
52% 51%

8. 8FINNISH CENTRE FOR PENSIONS
Pension income has increased during retirement
Average overall pension of persons entering old-age retirement
in 1995 and followed-up through to 2015, €/month at 2015 value
Source: Finnish Centre for Pensions and Social Insurance Institution joint statistics.
1 000
1 100
1 200
1 300
1 400
1 500
1 600
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
€/month
1 516 €
1 250 €
Pensions of
those who
entered
old-age
retirement in
1995 up
some 20%

9. 9
Source: Statistics Finland income distribution statistics.
FINNISH CENTRE FOR PENSIONS
Pensioners’ disposable income up 48%
in real terms
Average disposable income per person (equivalent income) in 1995–2014,
€ per year at 2014 value
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
€/year
27 700 €
18 700 €
Pensioners In work Others

10. 10
Source: Statistics Finland income distribution statistics.
FINNISH CENTRE FOR PENSIONS
Pensioners’ disposable income unchanged
compared with employees
Pensioners’ average disposable income compared with employees
and total population in 1995–2014, %
Income ratio
varies with
economic
cycles
60
65
70
75
80
85
90
95
100
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
%
92%
78%
81%
93%
Pensioners / All households
Pensioners / Employees

11. 11
Source: Statistics Finland Consumer Survey.
FINNISH CENTRE FOR PENSIONS
Pensioner households’ consumption up 45%
in real terms
Household consumption spending per capita in 1995–2012,
€ per year at 2012 value
Pensioner
households’
consumption
remains at
two-thirds of
employed
population’s
0
5 000
10 000
15 000
20 000
25 000
30 000
1995 2001 2006 2012
€/year
Pensioners In work Others

12. 12
Source: Statistics Finland Wealth Survey.
FINNISH CENTRE FOR PENSIONS
Pensioner households’ net wealth more
than doubled
Households’ median net wealth in 1994–2013,
€ at 2013 value
Pensioner
households’
net wealth half
as much again
as employee
households’
wealth in 2013
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
1994 1998 2004 2009 2013
€
152 000 €
104 000 €
72 000 €
54 000 €
Pensioners Employees

13. 13
Source: Statistics Finland income distribution statistics.
FINNISH CENTRE FOR PENSIONS
Pensioners’ risk of poverty at same level
as in total population
At-risk-of-poverty rate (%) in 1995–2014,
poverty threshold 60% of median income
0
5
10
15
20
25
30
35
40
45
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
%
Pensioners In work Others All

14. 14
Source: Statistics Finland income distribution statistics.
FINNISH CENTRE FOR PENSIONS
At-risk-of-poverty rates in different groups
At-risk-of-poverty rate (60 %)
1995 2004 2014
All pensioners 7 13 13
Gender
Men 5 11 11
Women 7 14 14
Age
18–54 10 24 34
55–64 4 10 16
65–74 5 9 8
75+ 10 17 15
Family size
Single-living 13 26 27
With family 3 5 3
Single-living
18–54 25 44 59
55–64 12 26 37
65–74 10 21 19
75+ 15 27 25
Single-living 75+
Men 14 16 20
Women 15 29 27
Risk of
poverty
highest among
young
pensioners
and those
living alone
Persons over
75 the largest
at-risk-of-
poverty group

15. How have economic welfare
differences between
pensioners changed
over time?

16. 16FINNISH CENTRE FOR PENSIONS
Gender gap in pensions reduced
Women’s
earnings-
related
pension up
112%,
men’s up
58 %
Level and structure of overall pension by gender in 1995–2015,
€/month at 2015 value
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Survivors’
pension
Resident-
based-
pension
Earnings-
related
pension
€/month
95 00 05 10 15
Men Women
95 00 05 10 15
Women’s
increasing
labour force
participation
contributes to
reducing the
gender gap

17. 17FINNISH CENTRE FOR PENSIONS
Age group differences wider, highest pensions
in age group 65–74
Pensioners’ average overall pension by age in 1995–2015,
€/month at 2015 value
No real
increase in
pensions
for people
under 55
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
€/month
16–54 55–64 65–74 75–84 85– All

18. 18
Source: Statistics Finland income distribution statistics.
FINNISH CENTRE FOR PENSIONS
Slight increase in income differentials both
among pensioners and total population
Disposable income Gini coefficient in 1995–2014
The Gini
coefficient is a
measure of
income
inequality. The
higher the
coefficient, the
greater the
inequality.
0
5
10
15
20
25
30
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
%
Pensioners In work All

19. How do Finnish pensioners
fare in international
comparison?

20. Source: EU-SILC data.
20FINNISH CENTRE FOR PENSIONS
Finnish pensioners’ purchasing power just
above European average
Purchasing power parity for population 65+
in EU Member States in 2004 and 2013
0 10 000 20 000 30 000
EU average
EU15 average
Romania
Bulgaria
Croatia
Latvia
Lithuania
Slovakia
Estonia
Poland
Hungary
Czech Republic
Portugal
Cyprus
Greece
Malta
Spain
Slovenia
Ireland
Finland
Denmark
Belgium
Italy
Sweden
France
UK
Netherlands
Germany
Austria
Luxembourg
0 10 000 20 000 30 000
EU average
EU15 average
Romania
Latvia
Bulgaria
Lithuania
Estonia
Croatia
Hungary
Greece
Slovakia
Poland
Portugal
Czech Republic
Cyprus
Malta
Slovenia
Spain
Ireland
UK
Italy
Belgium
Finland
Denmark
Netherlands
Sweden
Germany
France
Austria
Luxembourg
€, ppp €, ppp
2004 2013

21. 21
Source: EU-SILC data.
FINNISH CENTRE FOR PENSIONS
Income inequality among Finnish pensioners
less pronounced than in EU on average
80/20 ratio for equivalent disposable monetary income
in population 65+ and people under 65 in 2013
0
1
2
3
4
5
6
7
8
PT
CY
RO
HR
FR
IT
ES
LV
UK
BG
DE
IE
EL
AT
LT
DK
LU
SE
SI
NL
PL
MT
FI
BE
HU
CZ
SK
EE
EUavg.
EU15avg.
under 65 65+
80/20 ratio
describes ratio
of incomes
received by top
and bottom
income
quintiles

22. 22
Source: EU-SILC data.
FINNISH CENTRE FOR PENSIONS
Pensioners’ poverty risk around European
average
Proportion of population 65+ at risk of poverty
(60% of median income) in 2013
0
5
10
15
20
25
30
35
EE
LV
HR
BG
CY
LT
UK
SI
MT
SE
DE
BE
FI
RO
PT
EL
AT
IT
PL
ES
IE
DK
FR
CZ
LU
SK
NL
HU
EUavg.
EU15avg.
%
Poverty risk
higher than EU
average among
single-living
pensioners,
women and
those aged
over 74

23. 23
Source: EU-SILC data.
FINNISH CENTRE FOR PENSIONS
Difficulties making ends meet and severe
material deprivation among pensioners in
Finland well below EU average
Difficulties making ends meet (65+), 2014 Severe material deprivation (65+), 2014
0 10 20 30 40 50 60 70 80 90 100
EU average
Sweden
Luxembourg
Germany
Finland
Denmark
Netherlands
UK
Austria
Belgium
France
Malta
Ireland
Spain
Slovenia
Czech…
Poland
Estonia
Italy
Cyprus
Portugal
Slovakia
Hungary
Latvia
Lithuania
Romania
Croatia
Bulgaria
Greece
%
serious difficulties difficulties slight difficulties
17.7
0 5 10 15 20 25 30 35 40 45
EU15 average
EU average
Luxembourg
Sweden
Denmark
Netherlands
Finland
UK
Austria
Belgium
Spain
France
Ireland
Germany
Czech Republic
Estonia
Slovenia
Cyprus
Malta
Italy
Slovakia
Poland
Portugal
Croatia
Greece
Hungary
Lithuania
Latvia
Romania
Bulgaria
1.7
%

24. Susan Kuivalainen, Juha Rantala, Kati Ahonen,
Kati Kuitto and Liisa-Maria Palomäki (eds.) 2017.
Eläkkeet ja eläkeläisten toimeentulo 1995-2015 [Pensions and
pensioners’ economic welfare 1995-2015].
Finnish Centre for Pensions, Studies 01/2017. Helsinki: Finnish
Centre for Pensions.
English summary