Finland’s Ministry of Social Affairs and Health has produced a proposal budget for 2025, with provisions for pension expenses taking a €14.5m cut when compared to 2024.

Despite the cut, the Ministry of Social Affairs and Health said around 36 per cent of its budget will be spent on pension expenditure.

The government will discuss the budget proposal in early September, after which it will finalise the budget proposal, and present it to parliament on 23 September. The final budget will be approved by parliament in December.

In total, the Ministry of Social Affairs and Health has proposed spending €5.5bn on pensions, which is €14.5 million less than in 2024. It said expenditure will be reduced by changes to benefits paid abroad (€38m) and housing allowance for pensioners (€12m), as well as raising the age limit for the national pension and rehabilitation allowance from 16 to 18 years ( €6.5m).

Changes to pensions abroad affect the county’s national pension, as it has been proposed that Finland will stop paying this basic state pension to recipients outside of Finland.

Under the existing legislation, benefits available under the National Pensions Act are paid to Finns residing abroad. This practice is based on an EU regulation and on bilateral social security agreements. Benefits available under the National Pensions Act are currently paid to around 25,000 persons residing outside Finland, about 18,000 of whom live in Sweden.

However, as part of its general government fiscal plan for 2025–2028, the government has outlined plans to stop the payment of benefits available under the National Pensions Act to persons living outside Finland.

In addition, the Finnish government has also tasked social partners with reforming the country’s partially funded earnings-related pension system for workers. Its ambition is to save €1bn in pension expenditure as a result of the reforms.

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