Study: Norwegians are biggest Nordic users of flexible pensions

Among the Nordic countries, it is Norway that has seen the greatest use made of pensions which allow earlier or later retirement than the average age, according to research by the Finnish Centre for Pensions. Nearly 40 percent of Norwegian men now claim their pension as soon as they can.

Norwegian men have started to draw on their pensions as early as they can, new study shows.

Given more choice over when they can start taking a pension, workers in Sweden, Finland and Norway have reacted differently, new research shows.

In a comparison of pension systems that allow flexibility on the timing of pension payment in Sweden, Norway and Finland, the Finnish Centre for Pensions revealed that a third of Norwegians  who have a right to take out an old-age pension do so early.

Take up of the equivalent pension in Sweden, however, has been more modest, the research showed.

In Norway — the country with the biggest change in retirement behaviour, according to the researchers, —almost 40 percent of the men claim their pension as soon as they can, at age 62, but another 40 percent wait until they turn 67.

But in both Norway and Sweden, people prefer to draw a full early pension rather than a partial one, with about 90 percent of those who have taken the early old-age pension taking the whole amount.

In Finland, the partial old-age pension came into effect at the beginning of this year.

By the end of September, the research showed that 11,000 people had applied for the pension and 9,400 had already started drawing it.

Sweden and Norway already had corresponding pensions set up a few years ago, and in both countries, it is possible to draw the full pension early, before reaching the retirement age.

Most takers of part-pensions are men

The figures showed that men in particular had been actively using the option in Norway to retire early.

It has also been the case in Finland that the majority of those getting a part-time pension have been men, according to the research.

Mika Vidlund, development manager at the Finnish Centre for Pensions, said: “Although we have other alternatives, men seem to take out 100 percent of their pensions as soon as it is possible. “Perhaps they think they are going to live for a shorter time than the women,” he suggested.

However, taking a pension and stopping work appeared to be two different things.

Once both Norwegians and Finns had taken out their pension, they continued working as before, according to the statistics.

In Sweden, though, initial enthusiasm for the early old-age pension when it was first introduced has since waned.

At the end of 2015, every fifth Swede aged between 61 and 64 had taken up an early old-age pension, and the gender difference was not pronounced, the research showed.

The pensions centre suggested taxation could explain some of the pension’s popularity in Finland and Norway, noting that in Sweden, taxation was stricter.

“In Sweden, it is common for people to draw the minimum pension amount that will give them the status of a pensioner. That way they are entitled to, for example, discounts in public transportation fees in Stockholm,” Vidlund said.

Swedes often re-invest the particle old-age pension into, for example, savings policies that improve the survivors’ benefits paid out of the earnings-related pension system, the research showed.

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