The Finnish Ministry of Social Affairs and Health has confirmed the life expectancy coefficient for 2025, which will reduce starting pensions by 5.241 per cent.

In its latest update, the Ministry confirmed that the life expectancy coefficient for the year 2025 is 0.94759, compared to 0.94692 in 2024.

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

This means that, as a result of the revised life expectancy coefficient, the old-age pensions of those born in 1963 starting in 2025 or later will fall by 5.241 per cent.

The updated life expectancy coefficient is also set to reduce disability pensions granted on the basis of incapacity starting in 2025.

In addition to this, it will also affect family pensions starting in 2024, partial early retirement pensions and career pensions.

However, the lifetime coefficient is not applied to the portion of the future pension.

The life expectancy coefficient, which was introduced in the 2005 pension reform, is an automatic stabiliser that adjusts the monthly pension to the general development of life expectancy.

This means that if the average life expectancy in Finland continues to rise, the life expectancy factor will reduce pensions.

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