Voluntary pension insurance (vapaaehtoinen eläkevakuutus) remains a relevant but evolving part of personal retirement planning in Finland. While statutory earnings‑related pensions continue to form the foundation of retirement income, voluntary arrangements still offer additional flexibility for individuals who wish to supplement their future pension. However, several major regulatory and tax changes have recently affected the attractiveness and conditions of voluntary pension saving, making it increasingly important to understand the rules that apply in 2026.
What Is Voluntary Pension Insurance?
Voluntary individual pension insurance is a long‑term savings product offered by insurance companies. The saver pays regular or lump‑sum premiums, and the insurer pays out pension income at an agreed retirement age. Funds may be paid depending on age, contract terms, or in the event of the insured person’s death.
Voluntary pension insurance belongs to the broader category of insurance‑based savings solutions in Finland, alongside individual pension insurance, savings life‑insurance (säästöhenkivakuutus), and capitalisation agreements (kapitalisaatiosopimus).
Taxation of Voluntary Pension Insurance in 2026
Taxation of payouts
- When a voluntary pension insurance payout is made while the insured is alive, only the return (profit) is taxable as capital income (30% or 34%), provided the insured and policyholder are the same person and the payment goes to the insured or close family members.
- If the insured and policyholder are different persons, the entire payout is taxable capital income for the recipient.
- If money is withdrawn partially, the insurer calculates the share of return included in the withdrawal, and that part is taxed as capital income.
Taxation at death
- Payments to close family members due to the insured’s death are generally taxed as inheritance (perintövero).
- For policies taken after 17 September 2009, heirs also pay capital income tax on the portion representing investment gain, in addition to inheritance tax.
Tax deductions
- As of 2026, voluntary pension insurance contributions continue to be deductible, but the Finnish government has already decided that this tax benefit will be abolished from 2027.
This makes 2026 the final year when the deduction remains unchanged.
Broader Pension System Changes That Affect Voluntary Saving (2026)
Although voluntary pension insurance rules themselves have not changed dramatically in 2026, the overall pension environment has shifted due to reforms affecting statutory pensions:
Unified pension accrual & contribution rates
As of 2026, pension accrual is 1.5% for all ages, and employee contributions are unified (TyEL 7.3%, YEL 24.4%).
This removes earlier age‑based differences and may influence how individuals plan their supplementary saving.
Higher insurance obligation age
Employers and self‑employed persons must insure earnings until age 69 (previously 68), meaning people work longer under mandatory pension schemes before relying on supplementary savings.
Pension index increases in 2026
Statutory pensions increase modestly in 2026 (earnings‑related +0.9%, national pensions +0.5%).
These changes collectively impact how attractive voluntary pension planning may be for different income groups.
Long‑Term Outlook: End of Tax Support in 2027
A key policy development is that the tax deduction for voluntary pension savings will be abolished starting in 2027, increasing the importance of reviewing contracts during 2026 while current rules still apply.
The government estimates this reform will increase tax revenue and primarily affects savings in voluntary individual pension insurance and long‑term savings agreements (PS‑tili).
For individuals, this means:
- Existing contracts remain valid, but tax benefits disappear after 1 January 2027.
- Small balances (up to €5,000) may be withdrawn as a lump sum without increased taxation once the law comes into force.
Is Voluntary Pension Insurance Still Relevant in 2026?
Yes — but it depends on individual circumstances.
Voluntary pension insurance still plays a role for people who:
- Want additional guaranteed pension income.
- Prefer insurance‑based savings rather than investment accounts.
- Wish to lock in disciplined, long‑term saving.
However, its relevance is decreasing due to:
- The upcoming removal of tax benefits.
- Availability of more flexible investment solutions (funds, investment accounts).
- Increasing work- and earnings‑based pension accrual due to changes in statutory pensions.
Thus, voluntary pension insurance is still relevant in 2026 but requires careful consideration.
Practical Recommendations for Individuals in 2026
- Review existing voluntary pension insurance contracts before the end of 2026 to understand how the 2027 changes will affect you.
- Consider whether alternative investment options may offer greater flexibility or tax efficiency going forward.
- Seek professional advice if unsure about the tax consequences of partial withdrawals, early termination, or capitalisation agreements.
Contact Leinonen Finland for Assistance
If you have questions about voluntary pension insurance, taxation, or how the 2027 reform affects your existing arrangements, Leinonen Finland is ready to help. Our specialists can support you in evaluating your contract, assessing tax implications, and choosing optimal long‑term solutions.
