02.10.2026
As many as 74% of Estonians do not believe they will receive a state pension that will enable them to live comfortably, according to a Norstat survey commissioned by LHV. In addition, for half of Estonia’s population, an adequate income in retirement means an amount twice as high as the current average pension.
Confidence in receiving a state pension that allows for a decent standard of living is lowest amongst those aged 30–39. As many as 81% of people in this age group do not find this likely. In the 18–29 age group, the corresponding figure is 68%; among 40–49-year-olds, it is 77%; among 50–59-year-olds, it is 70%; and among 60–75-year-olds, it is 71%.
According to Vahur Vallistu, Chairman of the Management Board of LHV Varahaldus, the results reflect higher expectations than before regarding quality of life throughout one’s lifetime. “More and more Estonians are realising that relying solely on the state pension is probably not the best strategy. A financial buffer for a comfortable retirement is built up over a long period, and smart savers make the most of the tax-advantaged opportunities offered by the II and III pillars first,” he said.
According to Vallistu, it is also worth considering increasing your personal contribution to the II pillar to 4% or 6% of your gross salary, to maximise the returns from decades of saving. It might also be worth considering making regular contributions to the III pillar, if possible. “Consistent and automated investment solutions are the most effective in supporting the growth of wealth over the long term,” Vallistu is convinced.
The survey revealed that 48% of Estonians consider a pension exceeding 1,500 euros a month to be sufficient for a decent standard of living. 42% of respondents estimate that pension in the range of 1,001–1,500 euros is enough. The actual average pension in Estonia is currently 860 euros.
In Vallistu’s view, these figures clearly illustrate the gap between people’s expectations and reality. The income of Estonian residents has one of the sharpest falls in the European Union after retirement. While, on average, a pension in the European Union amounts to nearly 70% of a person’s previous income, in Estonia it is around 40%. Vallistu pointed out that, primarily due to the demographic situation, the gap between the average wage and the state pension is only set to widen. It is therefore important to make additional contributions to the first, that is state pension pillar, yourself. “Saving in the II pillar, increasing the personal contributions and investing in the III pillar form a solid foundation that enables us to face the future with more confidence,” he said.
To increase monthly payments to the II pillar already from next year, an application to increase contributions must be submitted before 30 November. To date, more than 123,000 savers in the II pillar have already submitted this application. Contributions made to the III pillar up to the end of December will be eligible for an income tax refund next year, amounting to up to 15% of the person’s gross income, but no more than 6,000 euros in a year.
The survey was carried out in September this year by the research firm Norstat. A survey was carried out across Estonia, involving 1,000 people aged between 18 and 74 years.
LHV Pension Funds are managed by AS LHV Varahaldus. Read the prospectuses and key information documents of LHV Pension Funds at lhv.ee/en/second-pillar. The rate of return of the fund in the previous periods does not constitute a promise or a point of reference for the fund’s rate of return in future periods. The preservation of the value of the sum invested into the fund is not guaranteed.
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