Analytics, Estonia, Financial Services, Legislation, Pensioners

The new value of the pension index, according to the draft regulation, is 1.076. This means an increase of 7.6% on average in pensions and the daily rate of the work ability allowance, spokespeople for the ministry said.

"Along with increases in wages, also pensions will rise, and the wage rise of last year is reflected in this year's pension rise, which is even bigger than expected," Minister of Social Protection Kaia Iva said.

The minister said that, for instance, the average size of pension for people with an employment record of 44 years will be 446.5 euros from April 1, more than 30 euros higher than the average figure of 415.6 euros thus far.

The annual reindexation of pensions will cost the government approximately 97.6 million euros this year. The indexation concerns 375,600 pensioners and an estimated 62,600 recipients of the work ability allowance. 

The present system of indexation of pensions took effect from Jan.1, 2008 when the change in the index was pegged to the receipts of social tax to a bigger degree.