Pensioners living rural area narrowly manage expenses

Pensioners, who are living at the rural area struggle with making ends meet slightly more often than do urban retirees, according to a survey published by the Finnish Centre for Pensions.

Two out of five (40%) rural retirees and one in three (33%) urban retirees state that they have no money left after covering the necessary expenses, said a press release from the Finnish Centre for Pensions.

Retirees in rural areas struggle more often than retirees in urban areas to cover medical and housing expenses.

More than every third retiree living in rural areas struggle to some degree with covering these costs. Only one in four retirees living in urban areas find it somewhat difficult to cover these costs.

“It is somewhat surprising that rural retirees struggle more than urban retirees to cover housing expenses since housing costs are lower in rural than urban areas. However, since rural retirees have much lower earnings than urban retirees, the former find it more difficult to cover housing expenses and to make ends meet in general,” said economist Satu Nivalainen of Finnish Centre for Pensions.

Financial satisfaction lower in rural areas

As a rule, retirees living in rural areas are less satisfied with their financial situation compared to retirees living in urban areas. Two out of five (41%) rural retirees and one in three (35%) urban retirees perceive their financial satisfaction to be low.

“The regional differences in the perceived economic well-being are clearly smaller than might be expected based on the income differences. In practice, making a living on a lower income is easier in rural than in urban areas. The underlying reasons may be a greater self-sufficiency in rural areas and different consumption habits”, Nivalainen explained.

Life satisfaction among rural retirees is on the same level as among urban retirees.

Despite shortages in economic well-being, the life satisfaction of rural retirees is at an equal level with that of urban retirees. On a scale from 0-10, retirees’ average life satisfaction is 7.

In other words, there are certain factors that increase life satisfaction among rural retirees and compensate for their weaker income. For example, rural retirees more often live in owner-occupied houses than do urban retirees. The study shows that living in an owner-occupied house is linked to life satisfaction.

“Home ownership offers financial security and foreseeability, which increases life satisfaction. This is particularly the case if the living expenses are reasonable and the house or apartment is in relatively good condition,” said economist Kati Ahonen of Finnish Centre for Pensions.

The extensive study of the Finnish Centre for Pensions is based on a questionnaire survey conducted in 2017. The respondents (2,909 pension recipients) were aged between 55 and 85 years and received an old-age, disability or partial disability pension. The response rate was exceptionally high: 73 per cent.