The future of pensions: The fight for a decent life after the end of a professional career

In the new one NAV analysis examined society's wishes and expectations regarding their own retirement. More than half want to stop working at age 62 or earlier but believe they will have to work longer. About 20 percent of respondents plan to work until the age of 70 or more. The analysis was conducted by Frøydis M. Bakken, Atle F. Bjørnstad and Espen S. Dahl in the NAV Knowledge Department.

– Good health is the most important factor in working longer, followed by finances and various workplace characteristics such as good working environment and limited ability to work. Good health public pensions will therefore be a key condition for the success of a pension system in which society will work longer, says Dahl.

Many people worry about whether they will receive a sufficient pension

In the future there will be fewer people of working age, and this will increase number of retirees. Today's pension system should stimulate a longer professional career through strong work incentives. The adjustment to life expectancy introduced with the 2011 pension reform means that younger groups must postpone leaving life professional compared to older people if they are to receive equally high pensions. Thanks to the pension settlement concluded with the Storting in winter 2024, age pension will increase with growth average life expectancy.

The amount of an individual's pension depends mainly on their earnings during their working life. The vast majority face a drop in income the day they decide to leave their job.

– Nearly half responded that they did not think their pension would be sufficient to lead the life they wanted as a retiree. These numbers indicate that many people expect to have to lower their standard of living or work for longer than they really want, Dahl says.

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Greater uncertainty among the youngest

Most pension surveys were aimed at people approaching retirement age. In this study, NAV decided to ask the entire working population aged 30 to 60. – We did this to hear what young people think about pensions. This is what the youngest will feel the most changes in the pension system in connection with the pension reform of 2011 and the increase in age limits, says Dahl.

When asked whether they think their pension will be sufficient to lead the life they want as retirees. The youngest respondents are more uncertain than the oldest. 53% of respondents answered this question. people aged 30-39 years old answered "no", and in the group 50-59 years old the same answer was 45%. people aged 50–59.

– There may be several reasons for this. In short, there is greater uncertainty about how large young people's final retirement portfolios will be. Firstly, the pension system is changing and it is difficult for the youngest to know what will actually apply when they start receiving a pension in the future. At the same time, there is uncertainty about what their lives will look like in general, and specifically about their careers and what they will actually earn in the future, Dahl says.

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Half say they are saving for retirement on their own

NAV also asked questions about retirement savings such as individual pension savings (IPS) or other savings through funds or savings accounts to use as a retiree.

– Almost half of them answered on their own saves for retirement. About 40 percent people who do not think that pensions are sufficient say that they do not save for retirement on their own. People who rate their finances as good or very good (61 percent savings) save more often than people with average or worse finances (35 percent savings), says Dahl.

There is a lot of interest in pensions, but many have not calculated their expected pension

In the NAV pension survey, respondents answer that they are interested in their own future pension. Over 80 percent replied that they were interested or very interested. However, only half of them responded that they had used a pension calculator or otherwise calculated their future pension amount. Of those who actually calculated their pension, more than half responded that the pension was lower than they expected.

You can find a retirement calculator here HERE .

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Source: NAV, Photo: pixabay

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