Finnish earnings-related pension providers reported 'strong growth' in 2024, but the Finnish Pensions Alliance (Tela) has warned of a 'gloomy' 2025.

Earnings-related pension investments continued to grow in the last quarter of 2024, during which assets appreciated around €4bn.

At the end of the year, the funds available for financing Finnish earnings-related pensions were worth €271bn in total.

The nominal yield on earnings-related pension assets last year was 9.5 per cent.

The real yield, adjusted to remove the effects of inflation on total return, was 8.7 per cent, and equivalent to an extra €20bn.

“The year 2024 was a good investment year for pension providers," said Tela chief economist, Mikko Mäkinen.

“The slower inflation rate and central banks’ interest-rate cuts supported the development of the investment markets, and almost all asset classes developed favourably,” he added.

Indeed, the best yield came from quoted stocks, first and foremost from the US market, led by tech companies.

Mäkinen noted “large geographical differences in equity investments.”

“In Europe, particularly Finland, stock market yields paled compared to the dynamic American economy. In these regions, improving the conditions for economic growth is important,” he said.

Equity investments, unquoted shares, hedge funds and fixed-income investments also performed well last year.

However, the average real yield on property investments remained close to zero.

"After the strong growth of 2024, the outlook for this year is not as bright," according to Mäkinen.

“The global situation is quite bleak right now, and the investment prospects for 2025 are particularly overshadowed by increased geopolitical tensions and an escalating trade war.”

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