Amount of pension

The amount of your pension is affected by your earnings from employment and the number of years you have worked. Pension for the self-employed is calculated based on YEL confirmed income. Certain other social security benefits also accrue pension.

Pension accrues on earnings from employment

For wage-earners, pension accrues on their earnings from employment. Usually, the earnings that accrue pension are the same as the salary that is subject to withholding tax.

We obtain earnings information from the Incomes Register; all employers are obligated to report the salaries they pay to the Incomes Register. Pension is calculated on gross earnings.

For self-employed persons, pension accrues on their confirmed income under YEL insurance.

Pension accrues at a rate of

  • 1.5% per year for 17–52-year-olds and from the age of 63 on
  • 1.7% per year for 53–62-year-olds (effective until the end of 2025)

Pension is calculated one year at a time. The formula is simple: 1.5% of annual earnings is divided by 12, which gives you the amount of monthly pension that has accrued in the course of one year.

The amount of pension is also affected by

  • the number of employment years
  • certain unpaid periods that accrue pension
  • the life expectancy coefficient, which is based on year of birth
  • a possible increment for deferred retirement after reaching the minimum retirement age
  • index increments

You can see the amount of pension you have accrued in your pension record in Varma’s online service.

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National pension

National pension can supplement your pension if your earnings-related pension is below Kela’s income limits:

  • EUR 1,373.30 if you live alone
  • EUR 1,230.63 if you live with another person

More information on national pension is available on Kela’s website

Additional information on the composition of earnings-related pension

Varma secures your earnings-related pension

Pension for unpaid periods

Since 2005, pension has also accrued on many benefits received during unpaid periods. The condition for accruing pension is that you have earned at least EUR 18,410.22 during your career.

Various benefits received during unpaid periods accrue pension according to different percentages. You can see the basis for earning pension during unpaid periods in your pension record. The benefits will show in your pension record only in spring of the year after the benefit was received. The accrual percentage is 1.5%.

How does pension accrue on different unpaid periods?

The earnings basis for maternity, special maternity, paternity and parental allowance is usually the income confirmed in taxation. The earnings basis for a self-employed person is the person’s income under YEL or MyEL.

When calculating pension, 121% of the earnings basis is taken into account.

The earnings-related unemployment allowance paid by an unemployment fund accrues pension until the minimum age of retirement. The earnings basis is the earnings on which the unemployment fund calculates the amount of earnings-related unemployment allowance.

The earnings basis for a self-employed person receiving the earnings-related unemployment allowance is, at most, the amount of the person’s confirmed income under YEL.

When calculating pension, 75% of the basis is taken into account.

Pension does not accrue on the basic unemployment allowance or labour market subsidy paid by Kela.

The earnings basis is the earnings on which the job alternation compensation is based. When calculating pension, 55% of the basis is taken into account.

Pension accrues on periods of sickness allowance if the allowance is paid directly to the recipient of the allowance.

  • Sickness allowance, partial sickness allowance and special care allowance: the earnings basis is usually the income confirmed in taxation. The earnings basis for partial sickness allowance is half of that. For the self-employed, the earnings basis is calculated using the YEL confirmed income that is the basis for calculating sickness allowance. When calculating pension, 62% of the basis is taken into account.
  • Daily allowance for a communicable disease: The earnings basis is your salary; for the self-employed, it is their YEL confirmed income. 65% of the basis is taken into account.
  • Rehabilitation allowance: The earnings basis is the person’s average earnings in the five calendar years preceding the year when rehabilitation was applied for. The earnings basis for Kela’s rehabilitation allowance is usually the income confirmed in taxation. 55% of the basis is taken into account.
  • Daily allowance under motor liability, accident and military injury insurance: the benefit is based on the employer’s report or on your tax information; for the self-employed, it is based on the company’s accounting data. 65% of the basis for the benefit is taken into account.

Adult education allowance: For employees, the earnings basis is their previous year’s earnings. For the self-employed, the basis is EUR 767.09 per month.

When calculating pension, 65% of the earnings basis is taken into account.

Pension accrues on the basis of a monthly income of EUR 767.09 from studies leading to a university degree or vocational qualification starting from the age of 18.

  • Higher university degree: pension accrues for a maximum of 5 years.
  • Polytechnic degree and similar degrees: pension accrues for a maximum of 4 years.
  • Lower university degree: pension accrues for a maximum of 3 years.
  • Vocational upper secondary qualification: pension accrues for a maximum of 3 years.

If you are studying for two different degrees or qualifications, they are counted together and the total pension accrual period is limited to five years.

If you are studying for a degree or qualification abroad, you accrue pension the same as for a Finnish degree/qualification. The condition is that you have received financial aid for your studies in accordance with the Finnish Act on Financial Aid for Students.

The pension that has accrued on studies will only show in the pension record once the degree/qualification is completed.

Pension accrues on the basis of a monthly income of EUR 767.09 from caring for a child under the age of 3 at home. In this case, pension accrues only if there is no pension accrual from employment.

Amount of earnings-related pension according to different types of pension

The amount of earnings-related pension is also affected by the type of pension in question. In our Online Service, you can estimate the amount of your old-age pension, partial old-age pension, disability pension or rehabilitation allowance based on your personal information.

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Old-age pension is the pension you have accrued throughout your years of employment from all of your employment relationships and/or self-employed activities. You will receive old-age pension once you have reached a certain age, your employment ends and you apply for the pension. 

Old-age pension

Partial old-age pension, meaning 25 or 50% of your full pension, is possible even before reaching the minimum retirement age. If you retire before reaching your minimum retirement age, the withdrawn portion will be subject to a permanent reduction. The reduction is 0.4% for every month of early retirement until you reach your minimum old-age retirement age.

Partial old-age pension

Disability pension is the amount of pension that has accrued until the onset of an illness, and often also the so-called projected pension, meaning the pension from the onset of the illness until the minimum retirement age. Partial disability pension is half of the full disability pension.

Disability pension

The years-of-service pension is the pension that has accrued until the start of the pension. The years-of-service pension does not include the projected pension component.

Years-of-service pension

During a vocational rehabilitation period, your income is secured through rehabilitation allowance. It amounts to the disability pension plus 33%.

Varma supports your vocational rehabilitation

Survivors’ pension is determined by the number of beneficiaries and is equal at most to the deceased’s earnings-related pension.

At most half of the deceased’s pension is granted to the surviving spouse as survivors’ pension. The surviving spouse’s own earnings-related pensions affect the amount of survivors’ pension (i.e. ‘surviving spouse’s pension’) that he/she will receive. Find out about the surviving spouse’s entitlement to pension and at the same time calculate how his/her pension security affects the surviving spouse’s pension.

Survivors´pension

Life expectancy coefficient

The life expectancy coefficient is used when pension begins; in other words, when the pension is calculated.

The life expectancy coefficient is confirmed for each age cohort at the age of 62. The coefficient for your age cohort will be applied to your pension regardless of your age when your pension begins.

The life expectancy coefficient reduces the amount of new pensions as the expected average life expectancy changes. The purpose of the coefficient is to adapt the level of new earnings-related pensions and pension expenditure to rising life expectancy.

Upon reaching the target retirement age, the amount of the pension reduction caused by the life expectancy coefficient is more or less the same as the pension increase brought by the increment for deferred retirement.

Confirmed life expectancy coefficients on the Finnish Centre for Pensions’ website.

Increment for deferred retirement after reaching the minimum retirement age

If you retire after your minimum retirement age, the increment for deferred retirement will increase your pension by 0.4% for every month that you defer your retirement.

For example, if you defer your retirement by one year, your pension will be increased by 4.8% (12 x 0.4%).

The increment for deferred retirement does not apply to periods during which you receive unemployment benefits, old-age pension or disability pension.

Earnings-related pension index and wage coefficient

Two indices are used in earnings-related pensions: the wage coefficient and the earnings-related pension index. Both are a combination of Statistics Finland’s Index of Wage and Salary Earnings and Consumer Price Index.

When you retire, the wages and income you earned during your career are adjusted to the level of the year in which your pension begins by a wage coefficient. In the wage coefficient, the change in the level of wage-earners’ earnings is weighted 80% and the change in consumer prices is weighted 20%. In 2021, the change compared to the previous year is approximately 1.3%.

During your retirement, the earnings-related pension index protects your pension from inflation. The amount of your pension is adjusted by the earnings-related pension index every January. In the earnings-related pension index, the change in consumer prices accounts for 80% and the change in the level of earnings for 20%. In 2021, the change compared to the previous year is approximately 0.5%.

Help with using our services

Take care of your pension matters online

In our online service, you can, for instance

  • check your pension record to see how much pension you have accrued
  • see an estimate of the amount of your future pension
  • calculate estimates for other types of pension
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