During the first half of 2024, almost 38,000 people in Estonia submitted applications to increase their monthly contributions to the second pension pillar from next year.
More than half of those who applied are Swedbank clients, the majority of whom chose the maximum payment rate, meaning 6 percent of their gross monthly pay.
“Since the beginning of this year, residents of Estonia have been able to submit applications to increase their second pension pillar contributions from the current 2 percent to 4 or 6 percent without losing the government’s 4 percent contribution from the social tax on their salary. In the first half of the year, nearly 38,000 people applied to increase their contributions. This demonstrates that people in Estonia feel the need for greater financial security than what is offered by the current 2 + 4 system, where people have been able to contribute only 2 percent of their gross pay,” Kaire Peik, head of pensions at Swedbank Estonia, said in a press release.
Applications submitted before the end of November will take effect from January of the following year. The percentage of one’s gross pay paid into the second pillar can be changed once a year.
“While at the beginning of the year the most popular option was 6 percent, in recent months the number of people who choose 4 percent as the new rate has started to grow. Application to increase one’s monthly payments into the second pillar from January 1, 2025 runs until the end of November. We forecast that at the end of the year there will also be the largest number of applications,” Peik added.
Source: BNS
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