Finnish pensioners residing on the sunny Costa del Sol face significant challenges as the Finnish Parliament has passed legislation terminating payments of state earnings-related pensions to recipients living outside Finland, effective February 1, 2025. This move has left many retirees rethinking their dreams of retirement under the Spanish sun.
The new law primarily targets those Finns living not only within Spain but also across other EU and EEA countries, Switzerland, and the UK. The Finnish government cited financial efficiency as the main driver of this legislation. Supporters of the bill argue it is necessary due to the country's declining population, largely attributed to low birth rates and increasing emigration rates. Adam Woodward, who reported on the topic, noted, "The financial effect of both is leading to less local taxes and less internal spending."
Beginning next February, existing pensioners will lose their national pension payments when living abroad, with special exemptions only for individuals receiving survivors' pensions—such as widows and orphans—who will continue to receive benefits regardless of their location.
Among the approximately 20,000 Finnish pensioners expected to be impacted, most will see reductions of less than €200 per month, but for around 4,500 individuals, the losses could exceed €200, severely affecting their living standards. Many of these pensioners have made Malaga province their home, where nearly 7,000 Finnish citizens have already settled.
Healthcare will also be affected, as the new legislation withdraws Finland from agreements concerning the S1 form and European Health Card, meaning Finnish citizens will now face out-of-pocket expenses related to medical treatment. These changes compel Finnish retirees to purchase private health insurance to cover necessary services.
Woodward also pointed out, "Those planning to move permanently from Finland to another EU or EEA country will see their national pension payments terminated the month after relocation." This stipulation emphasizes the challenges newly relocated pensioners will face as well.
The changes have generated mixed reactions among Finnish retirees. While some comprehend the financial motivations behind the reform, others within the community feel the decision significantly undermines their retirement plans and financial stability.
With this legislative shift poised to take effect very soon, Finnish retirees living across Europe must brace themselves for the ramifications. Many dreamt of enjoying their golden years savoring life and sunshine but now face uncertainty about meeting basic living expenses. The hope remains for future negotiations or adjustments to soften the blow of these tough financial realities.
