Reduced life expectancy in Estonia may lead to lower pension age
According to data released by Statistics Estonia on Thursday, both the life expectancy and disability-free life expectancy in Estonia fell last year. Should this trend continue, it's possible that the pension age won't continue to increase, but rather decrease instead.
Life expectancy, which previously interested primarily those involved in public health, is something middle-aged people should monitor as well, as the pension age in Estonia will soon be linked to life expectancy.
"In 2021, life expectancy in Estonia stood at 77.2 years, including 73.8 years for men and 81.4 years for women," said Eveli Voolens, leading analyst at Statistics Estonia. "If we look at the data, life expectancy has fallen for both men and women, and slipped back to levels we last saw eight years ago."
Estonia hasn't seen such a drastic decrease in life expectancy in the past 30 years, and according to Voolens, this drop is related to the COVID-19 pandemic. It's too soon to say whether Estonia's life expectancy will continue to fall, however, as the future course of the pandemic remains unclear.
In 2018, Estonia decided to peg the country's pension age to life expectancy starting in 2027.
"As life expectancy now fell in 2021, then it's possible that in 2027, the pension age will fall below 65, but that's not certain, because we don't look at the average life expectancy of one year; taken into account is the five-year average," explained Kristiina Selgis, head of pension policy at the Ministry of Social Affairs.
Selgis said it's also worth bearing in mind that while the pension age will be calculated based on Statistics Estonia figures as well, there's a key difference involved.
"When it comes to pension age, we don't look at how long someone born now has left to live, but rather the life expectancy of 65-year-olds," she explained. But that figure dropped significantly last year as well — by 1.29 years.
Under the new system, the Estonian government will establish the retirement age two years in advance, meaning that from what age people will receive a pension in 2027 will be determined on January 1, 2025. Currently there is no upper cap on the pension age.
"A limit has been set that the pension age cannot increase by more than three months a year, but there is no limit on reducing it, meaning that if the five-year average life expectancy really does decrease by a year, for example, then under current law, the pension age will decrease by a year as well," Selgis said.
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Editor: Aili Vahtla
