The Finnish Ministry for Social Affairs and Health has confirmed the indices for earnings-related pension insurance for 2024, which will result in a pension increase of around 5.7 per cent.

Next year, the earnings-related pension index is 3,037, which means that pensions will rise by approximately 5.7 per cent at the start of the year.

The confirmed wage coefficient is 1.637, which means the salary coefficient will increase by around 5.1 per cent.

The earnings-related pension index is used to adjust the paid earnings-related pensions, while the wage coefficient affects the calculation of the future earnings-related pension and several money and limit amounts that apply to employers and self-employed workers.

At the beginning of 2024, the earnings-related pension index will grow slightly more than the wage coefficient.

In 2024, the lower limit for the obligation to take out TyEL insurance will be €68.57 per month, up from €65.26 per month in 2023.

Meanwhile, the lower limit for YEL income in 2024 will be €9,010.28 and the upper limit will be €204,625, compared to €8,575.45 and €194,750, respectively, in 2023.

Finnish pension company, Ilmarinen, noted: “If you have retired, the earnings-related pension index is used to adjust the paid earnings-related pensions.

“When calculating the earnings-related pension index, the portion of change in wages accounts for 20 per cent and the change in prices for 80 per cent.

“The earnings-related pension index and wage coefficient are used to ensure that the amount of pension is reasonable in relation to the career-long earnings and that the purchasing power of current pensions is maintained.

“The current pensions’ amounts are adjusted annually with the earnings-related pension index at the start of January. The indices therefore secure the earnings-related pension amounts.”

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