Pensions at a Glance 2025: Norway
Table of contents
This country note shows how Norway compares with other OECD countries in Pensions at a Glance 2025. This edition covers recent pension reforms and includes a focus on gender pension gaps.
Norwegian pensions mitigate the transmission of earnings inequality into old-age income inequality. The relative income poverty rate is below 5% for people older than 65 in Norway, as in Denmark, Finland, Iceland and the Netherlands, compared to the OECD average of 15%. The guarantee pension (first-tier) tops up the earnings-related pension to 33% of the gross average wage in Norway, and only Denmark, Iceland and New Zealand grant higher non-contributory pensions. The level of the guarantee pension (and a previous minimum pension) has kept pace with wages over the last two decades. Compared to population-wide average, the disposable income of people older than 65 stands at 87% in the OECD on average and at 90% in Norway, where it increased substantially from 71% in 2000.
Difference between the average pension of men and women relative to the average pension of men
Source: Figure 2.1
Current and future normal retirement ages
Source: Figure 2.10
The gender pension gap has decreased substantially since 2007, from 31% to 18%, hence from above to below the OECD average, at 28% and 23%, respectively. Gender differences in lifetime earnings are the main driver of the gender pension gap and should be primarily addressed at the source. Although lower than in most other OECD countries, gender disparities in the labour market remain. The gender gap in expected career duration at 3 years is half the average gap across OECD countries, and it reached low levels already more than 20 years ago, while the gaps in hours worked and pay have decreased over the last 20 years. These three factors contribute to the gender gap in lifetime earnings of 28%, below the OECD average of 35% but above 20% or less in Lithuania and Slovenia.
The Norwegian pension system reduces gender gaps mainly through high first-tier pensions and care-related pension credits. Women make 83% of recipients of first-tier pensions. As most OECD countries, Norway provides care credits for childcare periods, which were introduced in the early 1990s, as in several countries including Germany and Switzerland. At the average-wage level, a mother of two children having a five-year break in employment for childcare can expect her pension to be 3.6% lower than that of a mother without such a break, compared to 4.9% lower on average across OECD countries. Norway, along with twelve other OECD countries, also grants pension credits for providing informal care to adults, which is predominantly delivered by women. However, there is an upside risk for the future GPG as permanent survivor pensions – which largely benefit women and were included in the previous defined benefit (DB) scheme – are not part of the notional defined contribution (NDC) scheme, which has been gradually replacing the DB scheme since 2011. The NDC scheme will be fully effective for people born in 1963 or later.
The current normal retirement age at 67 is higher in Norway than the OECD average of 64.3. If the calculated pension is equal to or higher than the guarantee pension, it is possible to retire from age 62, subject to roughly actuarially neutral benefit adjustments. Many people claim pensions below the normal retirement age and the effective age of labour market exit is one year lower than the average across OECD countries. Following a 2024 parliamentary agreement, Norway is in the process of legislating a two-thirds link between the statutory retirement age and life expectancy. Currently, in Finland, the Netherlands, Portugal and Sweden, the statutory retirement age is increased by two‑thirds of life-expectancy gains, whereas it is indexed fully in Denmark, Estonia, Greece, Italy and the Slovak Republic. If longevity improvements are equal to UN projections, the retirement age will increase to 69 years in Norway for people born in 2002, remaining above the OECD average, which will be 66.2 years based on current legislation. Norway would then join Finland, Sweden and Italy that link both the pension level and the retirement age to life expectancy in order to secure financial sustainability and protect pension adequacy. Still, this double link will not be able to offset the moderate pressure stemming from the expected decline of working-age population by 7% in the next four decades. To offset this decline, NDC accounts would need to be linked to the total wages (as in Latvia and Poland) or GDP (as in Italy) whereas they are linked to the average wage in Norway (as in Sweden). This decline of working-age population is expected to be lower than in most OECD countries, as the fertility has declined substantially only recently – to 1.41 in 2024 down from 1.82 in 2004 – and immigration has been an important offsetting factor. As a result, public pension expenditure (including disability pensions and housing benefits) is projected to peak at 12.2% of GDP around 2035, from 11.1% in 2024, and remain within these brackets in the following decades.
As part of the political agreement, the penalty in case of early retirement would be reduced by the introduction of a flat-rate supplement. The measure would provide a top-up to people retiring between the age of 62 and 65, with these age limits increasing along with the normal retirement age. The full supplement, around 4% of gross economy-wide average earnings, would be paid to individuals retiring at 62, and the amount be gradually reduced as people retire between the age of 62 and 65. The benefit, called a “hardship scheme”, is, however, not targeted at jobs or occupations considered arduous or hazardous. The benefit is designed to mitigate the negative impact of the early-retirement penalty, and it might even eliminate the penalties for low earners. Hence, the supplement provides substantial disincentives to prolong working lives and might cover many people as 32% of new pensioners claimed pensions below 65 in the first half of 2025. To limit the use of the scheme, people choosing to be in the “hardship scheme” will only be able to combine work and pensions to a very limited extent. The process of introducing the legislation following up the parliamentary agreement from 2024 is somewhat delayed, and details of the “hardship scheme” are to be decided. The scheme would come into force just around the time when the first cohort (born in 1963) becomes eligible only to the NDC pensions in 2025 and is thereby fully affected by benefit adjustments for retiring earlier, embedded in the NDC design, as for older cohorts the share for NDC pensions were gradually increasing over the last 15 years.
High old-age safety nets and low old-age income inequality
High employment of older workers until age 65
High current normal retirement age and low pension spending
Relatively low future replacement rates for average earners
Contact
Maciej LIS (✉ maciej.lis@oecd.org)
Hervé BOULHOL (✉ herve.boulhol@oecd.org)
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The full book is available in English: OECD (2025), Pensions at a Glance 2025: OECD and G20 Indicators, OECD Publishing, Paris, https://doi.org/10.1787/e40274c1-en.
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