The Finnish Ministry of Social Affairs and Health has confirmed the life expectancy coefficient for 2024, which will reduce starting pensions by 5.3 per cent.

The Ministry confirmed that the life expectancy coefficient for those born in 1962 is 0.94692. When compared to the 2023 coefficient the value has grown, which is unprecedented. Until now, each year the value of the life expectancy coefficient has always been smaller than the previous year’s.

The change in the life expectancy coefficient means that old-age pensions and certain other pensions for those born in 1962 that start in 2024 will be reduced by 5.3 per cent. This is 0.3 per cent less than in 2023.

“The life expectancy coefficient is based on the realised mortality rates of those approaching their retirement age. The life expectancy of those aged 62 decreased for the third year in a row. In other words, the downward trend has continued since the beginning of the coronavirus pandemic,” Finnish Centre for Pensions development manager, Heikki Tikanmäki, said.

The life expectancy coefficient is applied when a person takes out their earnings-related pension for the first time. The pension amount listed on the pension record is multiplied by the estimated life expectancy coefficient.

The life expectancy coefficient introduced in the 2005 pension reform is an automatic stabiliser that adjusts the monthly pension to the general development of life expectancy. It is set for each birth cohort at the age of 62 and is applied to all earnings-related pensions when they start.

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