In May, the Finnish Centre for Pensions published a forecast of the 2025 indices. The wage coefficient is forecast to be slightly higher than the earnings-related pension index, unlike in 2024. The wage coefficient would increase the earned income affecting pension by 2.1 per cent and the earnings-related pension index would increase the pensions paid by 1.6 per cent compared to 2024. This year, the increase resulting from the wage coefficient was 5.1 per cent and the earnings-related pension index 5.7 per cent.
When should I retire?
If you are considering retiring at the turn of the year, according to the current forecast, retiring on 1 January 2025 would result in a slightly higher pension than retirement on 1 December 2024.
- If you retire on 1 December 2024, the earnings-related pension index would increase the amount of your pension paid by 1.6 per cent from 1 January 2025.
- If you retire on 1 January 2024, the earned income affecting your pension will be adjusted by using the 2025 wage coefficient when calculating your pension. The increase would be 2.1 per cent. Your pension will not be increased with the earnings-related pension index for the first time until 1 January 2026, using the earnings-related pension index for 2026.
The final 2025 indices will be available late in the autumn. The Ministry of Social Affairs and Health will confirm the indices by the end of October.
In October–November, after the indices have been confirmed, you can log in to Varma Online Service to calculate your estimated pension based on the new indices.
The earnings-related pension index is used to adjust any paid pensions
Earnings-related pensions are calculated by using two indices: the wage coefficient and earnings-related pension index.
The wage coefficient is used for calculating the pension for a retiring person. Wages and confirmed income for your working career are adjusted to the level of the year when the pension starts by using the wage coefficient. In the wage coefficient, changes in wage-earners’ income level are given a weighting of 80 per cent, whereas changes in consumer prices are given a weighting of 20 per cent.
During retirement, the amount of your pension is adjusted on an annual basis in January based on the earnings-related pension index. In the earnings-related pension index, the weight of changes in consumer prices is 80 per cent, whereas the weight of changes in the income level is 20 per cent.
The earnings-related pension index increases all paid pensions, old-age pensions, partial old-age pensions, disability pensions, years-of-service pensions, rehabilitation allowances and survivors’ pensions.
The percentage increases are the same for everyone regardless of the amount of earned income and pension, but the euro amount depends on the amount of earned income and pension.
If you are already retired, you can calculate the estimated amount of the index increase using the varma.fi calculator after the indices have been confirmed.
The index increase will be automatically applied to any paid pension and no separate application is required.
Further information: Economic forecast by the Finnish Centre for Pensions (in Finnish)
News updated on 29 August 2024 based on the earnings-related pension index and wage coefficient increase percentages pursuant to the most recent economic cycle forecast published by the Finnish Centre for Pensions.
Take these matters into account when considering retirement
- Plan the retirement to suit your own situation in life.
- Salaries are usually higher than pensions.
- Each month, more pension accrues based on earned income at a rate of 1.5 per cent.
- The increase for late retirement adds a further 0.4 per cent per month to the pension if not retiring on old-age pension immediately after reaching the minimum retirement age.
- When you apply for old-age pension, your employment relationship must end before the pension begins.
- Consider the impact of taxation and other benefits on pension.