The Finnish partial old-age pension is not extending working lives, as those opting to receive it continue to work as before, according to the Finnish Centre for Pensions (ETK).

After taking a partial old-age pension, around 60 per cent of wage earners saw their earnings remain the same, fluctuate as before taking out the pension or increase when followed up for a year after the start of the pension. ETK said this suggests that working was not reduced after taking the pension.

A small share – around every fifth – of those selecting to draw the partial old-age pension continued working with a lower wage level, which suggests they have cut down on working.

The partial old-age pension is designed to provide the opportunity to flexibly combine work and a pension, with the aim of extending working lives. The idea was that reduced working while drawing the pension would extend working lives.

“Based on wage income data, a large share of the recipients of this benefit do not reduce working. Therefore, the partial old-age pension does not seem to extend working lives substantially.

"Previous research has shown that working 61-year-olds who draw the partial old-age pension retire on a full old-age pension earlier than others,” ETK senior researcher, Ilari Ilmakunnas, said.

Furthermore, ETK found that the partial old-age pension may actually reduce the working life of some recipients of this benefit. This happens if the wage earner exits working life with the help of this pension benefit, or if receiving the pension and unemployment benefits together prolongs unemployment.

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