Trust of Finns high in pension system

Three out of four (74%) Finns trust the pension system, according to the pension barometer conducted by the Finnish Centre for Pensions, said the centre in a press release.

The trust has grown by an ample six percentage points since 2019. At the same time, the distrust has decreased by seven percentage points. Each year, the questionnaire survey measures how Finns relate to pensions and pension-related issues.

“The most significant change has occurred in the opinions of the 35-49-year-olds. Their trust in the pension system has grown by as much as 12 percentage points,” said Sanna Tenhunen, an economist at the Finnish Centre for Pensions.

According to Tenhunen, women, workers, the self-employed, those with a higher university degree and those with high income are more positive towards the pension system than before.

Retirees (90%) and the 50-64-year-olds who are approaching retirement age (77%) trust the pension system the most. Slightly less than one-sixth of the Finns have little or no trust in the pension system. The 25-34-year-olds are particularly concerned about the contribution burden falling on the younger generations.

“The good results can partly be explained by the fact that in situations of crisis such as the corona pandemic, the trust in public institutions is usually strengthened,” assessed Finnish Centre for Pensions Director Jaakko Kiander.

A majority of the Finns (69%) feel that the problems caused by the coronavirus have not had much of an impact on their trust in the pension system.

Relatively fewer Finns are concerned that the coronavirus would significantly weaken their income. Three per cent are very and 11 per cent are fairly concerned. Five per cent of the respondents say that they have experienced a significant drop in income.

“The trust in the pension system has gone down more often among the respondents who are anxious about their income and whose income has dropped during the corona crisis. This result corresponds to those of previous surveys in which unemployment was observed to affect trust,” explained Finnish Centre for Pensions Head of Research Susan Kuivalainen.

Kuivalainen believes that a prolonged corona crisis would increase income problems. Before long, this would also affect people’s trust in the pension system.

If the financial sustainability of the pension system had to be improved, the most accepted (42%) measure would still be to raise the pension contributions. Raising the retirement age is another measure that received at least some support. It would be accepted by every third Finn, but without reservations by only every tenth Finn.

The alternative of cutting pensions in payment or future pensions did not gain any support. Sixty-two per cent are unquestionably opposed to cutting pensions in payment. Nearly every second Finn adopts an equally strict line to cutting pensions to be paid out to future pensioners.