Incomes for YEL purposes rise by over €4,000 on average

By the end of 2024, the pension providers will review the incomes for YEL purposes (“YEL incomes”) of business owners whose YEL income is under €25,000.

The pension providers began a regular review of business owners’ YEL incomes last year. According to data from the Finnish Centre for Pensions, the median rise in YEL incomes resulting from these reviews was €4,000/year. In 2023, the pension providers reviewed the incomes of business owners whose YEL incomes were less than €15,000/year.

The average increase was €4,190. Of the business owners reviewed, three in four got a higher YEL income, while for one in four, it remained the same. We have previously reported on how the pension providers’ proposed new YEL incomes have not always been correct. The pension providers are obliged by law to consult business owners.

Registry data from the Finnish Centre for Pensions show that in 2023 the pension providers applied for a new, post-review YEL income recommendation for 73,000 business owners. Of this group, the review processes of around 61,000 have now been completed.

The average YEL income of business owners in this group was €10,574/year before the reviews. After the reviews, the average YEL income rose to €13,671/year.

The YEL income determines the business owner’s future pension, sick pay and compensation for voluntary occupational accident insurance. In addition, the YEL income affects the level of unemployment benefit and parental benefit.

Maximum increase of €85

Under the legislative amendment passed in 2023, a pension provider reviews a business owner’s YEL income every three years. It reviews the YEL income if it has not been reviewed for another reason during the last three calendar years.

By the end of 2024, the pension providers will review the YEL incomes of business owners whose YEL income is under €25,000. By the end of 2025, the pension providers will review the remaining YEL incomes.

In the two first review rounds, a pension provider can raise a business owner’s annual YEL income by €4,000 per review round. That means a maximum increase in YEL premiums of €85/month in each review round. With the business owner’s consent, the increase can be higher than this maximum increase.

Biggest change in lowest YEL incomes

According to preliminary data from the Finnish Centre for Pensions, the average level of all business owners’ YEL incomes last year was €23,659, and the median was €17,160.

Before wage coefficient reviews, YEL incomes rose by 3.4% on average. Before wage coefficient reviews, median YEL income rose by 10.2%.

“The biggest change has occurred among the lowest YEL incomes. The reason is the reviews of YEL incomes under €15,000 carried out by the pension providers,” says Miriam Hägele, a mathematician at the Finnish Centre for Pensions in a press release.

At the end of 2023, there were just under 214,000 business owners with YEL pension insurance in Finland, up from 213,000 at the end of 2022.

The statistics of the Finnish Centre for Pensions are preliminary. More accurate 2023 YEL income statistics will be available in the autumn of 2024.

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