27.11.2025
Vahur Vallistu, the Chairman of the Management Board of LHV Varahaldus, highlighted that if a person raises their personal contribution to the II pillar to 6%, then together with the state contribution, 10% of their gross salary will automatically go each month toward future financial security. ‘Over a long period, there is a significant difference between having 6% or 10% of gross salary moving into the II pillar with the state’s leverage. Larger contributions can mean tens of thousands of euros in additional income in the future, which accumulates almost unnoticed over the years,’ Vallistu said. He also noted that time is the investor’s greatest friend. The earlier one increases their II pillar contribution, the longer the money has to work for the individual.
According to Vallistu, the strong interest in increasing personal contributions to the II pillar reflects that Estonians increasingly understand the need to take responsibility for their future financial well-being. People realise that relying solely on the state is probably not the best approach. ‘According to studies, the average state pension will in the future amount to about one-third of the average salary, which will be insufficient to maintain the accustomed standard of living,’ he noted.
However, everyone can do a lot to increase financial security for retirement. ‘Consistent, cost-effective, and automated payments into the II pillar form the foundation. Increasing your personal contribution to your II pillar gives an extra boost to wealth accumulation, and any person who has made such a decision will likely thank themselves in the future,’ Vallistu said. He believes and hopes that the active interest in increasing II pillar contributions will continue. ‘This is one of the simplest and most effective steps you can take for your future, and you can start doing it today,’ Vallistu emphasised.
What do different contribution levels really mean?
For example, a 25-year-old earning the Estonian average gross salary of EUR 2,100 will accumulate for retirement:
- with a 2% contribution: EUR 117,000;
- with a 6% contribution: EUR 196,000.
Adding the average annual nominal return of II pillar funds since 2002 (i.e. 3.9%), the value of the accumulated assets grows to:
- with a 2% contribution rate: EUR 235,000;
- with a 6% contribution rate: EUR 392,000.
The II pillar contribution rate can be increased until the end of this week through your home bank or the website www.pensionikeskus.ee. For everyone who submits an application before the end of November, the new contribution rate will take effect in 2026. For applications submitted later, the change will take effect a year later.
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