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Could Norway raise its retirement age to 70?

Some workers in Norway may need to work until they are 70 before they can retire and won't be able to draw a state pension until they are 65 at the earliest under new proposals set out by the Pension Committee on Thursday.

Published: 16 June 2022 10:43 CEST

Pictured is a pensioner

Norway could raise the retirement age for younger generations to 70 under a new proposal. Pictured is a pensioner. Photo by Tatiana P on Unsplash

Norway’s Pensions Committee will present its report on proposed changes to the pension system on Thursday. The committee’s leader has said that the retirement age should be raised ahead of the report’s full release on Thursday.

Under the current rules, the retirement age is 67, and people can begin to draw their state pensions from 62. However, the Pensions Committee has proposed raising the retirement age to 70 and a half and the age where you can draw your state pension to 65 and a half.

“Increasing the age limits is more financially sustainable, more people will stay longer in work,” committee leader, Kristin Skogen Lund, told public broadcaster NRK.

The committee was tasked with evaluating the last set of pension changes, which were introduced in 2011. The original reforms were introduced to ensure that the state could fund pensions through the National Insurance Scheme as the number of pensioners increased, and people lived longer.

READ ALSO: Can you claim your Norwegian pension from another country?

However, the retirement age of 70 wouldn’t be applied universally. As the committee wants to avoid disruption for those close to retiring, the retirement age wouldn’t be raised for older generations. Instead, the retirement age would apply to those born in the 90s.

Further, into the future, the committee expects the government’s financial room to manoeuvre to be significantly smaller, meaning the state will be dependent on reducing expenditures.

Despite this, the committee has suggested raising the minimum pension.

Overall, the committee head said that the proposals would probably not save the state money overall on pensions despite cost-cutting being part of the group’s mandate.

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Everything you need to know about Norway’s latest pension reform

Seven of Norway’s nine mainstream political parties have reached a parliamentary majority on pension reform in the Nordic country.

The country’s retirement age will increase alongside projected life expectancy under the new system.

The governing Labour Party (Ap) and Centre Party (Sp) were joined by the Conservative Party (H), Liberal (V), Green Party (MDG), Socialist Left Party (SV), and the Christian Democratic Party (KrF), in voting in favour of the proposal.

“I am happy about this historic and broad political agreement on a fairer pension system. The agreement illustrates that we can gather a solid majority around solutions that are good for people and that can stand the test of time,” Labour and Inclusion Minister Tonje Brenna said.

The government’s plan is based on proposals put forward by a parliamentary committee in 2022.

How will it work?

The current retirement age in Norway is 67, but people can begin drawing their state pension from the month before they turn 62.

Under the new rules, those born in 1972 will retire at 68 years, and the retirement age will rise by around one year per decade after that. Therefore, somebody born in the 1980s would have a retirement age of 69.

The right to access welfare such as sickness and unemployment benefits will also apply to those with an increased retirement age.

The lower limit will also be adjusted and increase with life expectancy.

Using the same example of those born in 1972, the lower limit will be raised to 63, while those born around 1982 cannot draw a state pension until they are 64.

Norway’s working ‘age limit’ will be increased too. Under current rules, employers can bring a working relationship to an end with no factual reason when they pass a certain age.

Public sector workers will see this age limit increased from 70 to 72. The limit in the private sector is 72.

The obligation to retire in certain occupations will also be removed to allow people to work longer. This obligation applies to professions with particularly demanding conditions, such as firefighters and health workers.

“This is an important contribution to combating age discrimination in working life”, Henrik Asheim, deputy leader of the Conservative Party, said.

There will also be increased tax deductions for those with private pension savings.

The pension scheme will be reassessed every ten years as part of the agreement.

Are there any exceptions?

Those forced to retire five years before the standard retirement age will receive a supplement via a hardship scheme.

The aim of this scheme is to cover those who are unable to work as they grow older, or due to poor health.

This will be 0.25 G. At current rates, this is around 30,000 kroner a year. G refers to the basic amount in Norway’s National Insurance Scheme. It is the amount which benefits and social security are set against.

There will also be increased provisions for those with disabilities.

What have people said about the proposals?

Seven of the main parties voted in favour of the proposals. However, the populist Progress Party (FrP) and far-left Red Party (R) were against the proposals.

The Progress Party believed those with the lowest pension would be left behind. The Red Party broadly agreed with the other proposals but disagreed with the increased retirement age.

The Norwegian Confederation of Trade Unions (LO) has called the agreement “Norwegian politics at its very best”.

Its leader, Peggy Hessen Følsvik, said she was satisfied that the government secured a cross-party agreement on the hardship scheme. Before the proposals were put through parliament, the trade union umbrella lobbied the government to include such a scheme.

Employer organisation, the Confederation of Norwegian Enterprise (NHO), said that it would now be essential to ensure that working environments allowed people to work for longer, but otherwise praised the government.

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