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Published: 18 March 2016

Risk of poverty has diminished most among pension-age people

Statistics Finland's income distribution statistics indicate that the risk of poverty has decreased most among the population aged 65 or over compared to 2007. The at-risk-poverty rate of persons aged 65 to 74 diminished from 16.6 to 8.1 per cent by 2014. The at-risk-of-poverty rate of persons aged 75 or over also contracted significantly, but remained high, 22.2 per cent in 2014. Differing from other age groups, the risk of poverty grew among young people compared to 2007, when the growth in income differentials and risk of poverty stopped among the whole population.

Change in the risk-of-poverty rate between 2007 and 2014 by age, percentage points

Change in the risk-of-poverty rate between 2007 and 2014 by age, percentage points

Slightly over one-third of persons aged 65 or over at-risk-of-poverty are retired from worker occupations, one quarter former lower-level salaried employees and nearly one quarter former farmers. However, the risk of poverty is high among former farmers: 46 per cent of those aged 75 or over and 21.4 per cent of those aged 65 to 74. The share of pensioners receiving other pension than employment pension among those aged 65 or over was low, so the share of the group among pensioners at-risk-of-poverty is also small, under four per cent. The at-risk-of-poverty rate is, however, high in this group of those receiving mainly national pension or survivor's pension, 29 per cent.

Of age groups, the at-risk-of-poverty rate was highest for those aged 18 to 24, of whom 29.7 per cent were at risk of poverty in 2014. Two-thirds of those at-risk-of-poverty belonging to this group are students. The at-risk-of-poverty rate of those aged 25 to 34 has grown by nearly four percentage points, or in relative terms most of all age groups compared to 2007. Among persons aged 25 to 34 at-risk-of-poverty, 30 per cent were students and 28.8 per cent unemployed persons.

The risk of poverty is deeper for young people aged 18 to 24 than for others, on average. One-third of those aged 18 to 24 below the most commonly used at-risk-of-poverty threshold (60% of median income) were also the most hard up, on the 40 per cent threshold in 2014 (Table). Persons aged 65 or over at-risk-of-poverty were, in turn, often close to the risk-of-poverty threshold of 60 per cent, or among those whose income was 50 to 59 per cent of the national median income.

Table. Number of persons at-risk-of-poverty in different sections of the at-risk-of-poverty distribution by the person s age in 2014

  Income below 40 %
of median
Income 40 % to 49 %
of median
Income 50 % to 59 %
of median
All persons
All persons 126 000 162 000 386 000 674 000 12,5
Aged 0 to 17 16 000 21 000 71 000 108 000 10,0
Aged 18 to 24 46 000 43 000 45 000 134 000 29,7
Aged 25 to 34 21 000 25 000 42 000 88 000 12,8
Aged 35 to 49 10 000 23 000 52 000 85 000 8,4
Aged 50 to 64 25 000 27 000 57 000 109 000 9,8
Aged 65 to 74 .. .. 49 000 49 000 8,0
Aged 75 or over .. 24 000 78 000 102 000 22,2

Persons are classified as being at-risk-of-poverty when the household's disposable monetary income per consumption unit 1) is below 60 per cent of the national median income. In 2014, the at-risk-of-poverty threshold for a one-person household was EUR 14,300 per year or EUR 1,190 per month. Income refers to the monetary income after taxes and consists of earned income, property income, and transfer income.

In the group close to the at-risk-of-poverty threshold, the income is at least EUR 11,910 but under 14,300 per year (EUR 990 to 1,190 per month). Persons whose household's disposable monetary income is below EUR 9,530 per year, that is, under EUR 794 per month per consumption unit are classified in the group most at-risk-of-poverty (income below 40% of median income) . The middlemost group at-risk-of-poverty, whose income is 40 to 49 per cent of the national median income, is placed between these income groups. The income per consumption unit for those belonging to the group is at least EUR 9,530 but under 11,910 per year (EUR 794 to 990 per month).

1) The consumption units are based on the so-called OECD's modified scale. One adult in the household is one consumption unit. Other persons in the household aged at least 14 each are 0.5 consumption units and children aged 0 to 13 each are 0.3 consumption units. A household with one adult member is one consumption unit, while a household consisting of spouses and one child aged under 14 together are 1.8 consumption units.

Source: Income Distribution Statistics 2014, Statistics Finland

Inquiries: Kaisa-Mari Okkonen 029 551 3408

Director in charge: Jari Tarkoma


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Updated 18.03.2016

Referencing instructions:

Official Statistics of Finland (OSF): Income distribution statistics [e-publication].
ISSN=1799-1331. Poverty 2014. Helsinki: Statistics Finland [referred: 19.7.2024].
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