Amount of pension

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 accrues until the age at which pension accrual ends, i.e. untill your maximum retirement age. Check your retirement age with our pension calculator.

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 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

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

• EUR 1,601.21 if you live alone (in 2024)
• EUR 1,434.88 if you live with another person (in 2024)

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

Varma secures your earnings-related pension

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 20,571.69 (in 2024) 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 at the latest in spring of the year after the benefit was received. The accrual percentage is 1.5%.

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.

Log in to Varma Online Service

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. Use the pension calculator to see when you can retire on old-age 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 may 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

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. The life expectancy coefficient is applied every time the pension starts, also at the target retirement age.

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

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.

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%. 

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%. 

Read more: Indices for earnings-related pension cover for 2024 have been confirmed.