Those in Baltic and Nordic countries are more likely to continue working during retirement, with the highest proportion of working pensioners in the European Union (EU) seen in Estonia, figures from Eurostat have revealed.

The latest figures from Eurostat showed that individuals in the EU are retiring later, as the transition from retirement has shifted to approximately five years later since 2012.

In addition to this, the average age at retirement was 61.3 years in 2023, 2.1 years higher than in 2012.

Eurostat suggested that the shift towards later retirement is mainly due to the increase in the eligible pension age, noting that most people (64.7 per cent) stopped working or did not work (22.4 per cent) within 6 months following the receipt of their first old-age pension, while only 13 per cent of pensioners continued to work.

However, the research showed that the share of people who continued to work varied "significantly" across countries, ranging from less than 2 per cent in Romania to 54.9 per cent in Estonia.

According to Eurostat, a "clear geographical pattern" emerged within this, with more than a third of people continuing to work in Baltic and Nordic countries in particular.

Estonia was top of the list, with 54.9 per cent of Estonians continuing to work closely followed by Latvia, where 44.2 per cent of pensioners work, while third place belonged to Lithuania (43.7 per cent).

However, there are differences in working conditions between these regions, as Eurostat found that, in Estonia, Latvia and Lithuania, people mainly continued to work in the same job without changes, whereas in Sweden and Finland, more than half of people changed their working conditions after receiving their old-age pension.

Conversely, less than 5 per cent of people continued to work in Romania, Greece and Spain, with more than half of these people making changes to their work arrangements.

Two primary reasons were found for continuing to work after receiving an old-age pension, as 36.3 per cent of people continued to work because they enjoyed working and being productive, while 28.6 per cent did so due to financial necessity.

Gender differences were revealed in the findings, as men are more likely to enjoy working and being productive (37.9 per cent compared with 34.3 per cent for women), and women are more likely to continue to work out of financial necessity as their main reason (30.4 per cent compared with 27.2 per cent for men).

Geographical differences were also seen, as in Denmark and the Netherlands, a high proportion of people (61 per cent and 59.6 per cent, respectively) continued to work because they enjoyed it.

In contrast, less than 20 per cent of people in Spain and Cyprus reported this reason.

Overall, financial necessity was the main reason in 11 EU countries, including Estonia, Latvia and Lithuania, while in 14 countries, people enjoyed working or being productive.

However, Eurostat found no correlation between the main reason for continuing to work and the proportion of people who continued to work.

Indeed, it pointed out that while countries such as Czechia, Ireland, Hungary and the Netherlands had a relatively high share of people continuing to work, and in these countries, the dominant reason was "enjoy working".

Luminor fund manager, Vahur Madisson, said that while working in retirement is not a problem in itself, since the majority do so for financial reasons, the situation is worrying.

"In welfare states – Switzerland, the Netherlands, Denmark and Norway – an average of 24 per cent of pensioners work," he continued.

"As many as 60 per cent of people there continue to work not because of additional income, but because they really enjoy their work. In Estonia, only a quarter of respondents have mentioned the aspect of work being enjoyable, and every tenth working pensioner's reason for going to work is the desire to be socially active.

"In Estonia, the average pension today is nearly 40 per cent of the average salary. We know that in the long term, the working-age population will decrease, which is why we cannot count on a rapid increase in the state pension, quite the opposite," he stated.

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