Impact of Raising the Eligibility Age for Benefits from 62 to 63 Last Year by One Year
The number of new early pension recipients who took their National Pension earlier than the originally eligible age, despite incurring losses, reached an all-time high last year.
According to the National Pension Service's "Status of New Early Pension Recipients by Year Over the Last 5 Years" released on the 12th, the number of new early pension recipients last year reached 112,031.
Last year was the first time the number of new early pension recipients exceeded 100,000. Looking at the number of new early pension recipients in recent years, it was around 60,000 with 43,544 in 2018, 53,607 in 2019, 51,883 in 2020, 47,707 in 2021, and 59,314 in 2022.
As the number of new early pension recipients increased, the total cumulative number of National Pension early recipients also rose.
The total number of early pension recipients by year showed an upward trend, from 581,338 in 2018 to 628,832 in 2019, 673,842 in 2020, 714,367 in 2021, 765,342 in 2022, and 856,132 last year.
As of March this year, the number stands at 885,350, the largest scale since the early pension system was introduced in 1999.
The Seoul Northern Regional Headquarters of the National Pension Service in Seodaemun-gu, Seoul. Photo by Yonhap News
The sharp increase in new early pension recipients last year is largely attributed to the postponement of the National Pension eligibility age.
When the National Pension was introduced in 1988, the pensionable age was 60. Since then, it has been delayed by one year every five years starting in 2013. Specifically, it was 61 from 2013 to 2017, 62 from 2018 to 2022, 63 from 2023 to 2027, 64 from 2028 to 2032, and 65 from 2033 to 2037.
Those born in 1961, who turned 62 last year, effectively had their pensionable age delayed by one year. Among them, some could not endure the income gap after retirement and applied for early pension, leading to a sharp increase in early recipients. Previously, when the eligibility age was postponed in 2013 and 2018, early pension applicants increased by 7.5% and 18.7% respectively compared to the previous year.
However, this "early old-age pension," which allows receiving the old-age pension 1 to 5 years earlier, is called a "loss pension." This is because the pension amount is reduced by 6% annually for each year taken early. If taken 5 years early, the recipient receives only 70% of the original pension amount for life. If taken 4 years early, it is 76%, 3 years early 82%, 2 years early 88%, and 1 year early 94%.
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