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WORKING IN SWEDEN

How to maximise your Swedish pension – even if you’re not planning to stay

In the excitement of getting stuck into life in a new country and tackling all the challenges that presents, it's easy for pensions to slip down the list of things to keep track of. But don't let it fall off the radar, follow The Local's guide to manage your Swedish pension.

How to maximise your Swedish pension – even if you're not planning to stay
If you're working in Sweden, you're probably entitled to a pension. Here's what you need to know. Photo: Janerik Henriksson/TT

The Swedish pension is part of the country’s social insurance system, and it can seem like a confusing beast at times. The good news is that if you’re living and working here, you’ll almost certainly be earning towards a pension, and you’ll be able to get that money even if you move elsewhere before retirement.

Exactly how much money goes into your pension pot depends on many factors, including your salary, length of time working in Sweden, your company’s policy, and your own personal decisions (especially if you’re self-employed).

Those who spend only a few years working in Sweden will earn a much smaller pension than people who work here for their whole lives, but that money could still come in useful once you retire, so it’s important to know what you’ll be entitled to.

The easiest way to understand how the Swedish pension works is breaking it down into three parts. There are three different sources for the Swedish pension: the state, your employer, and yourself.

First, there’s the state/general pension (allmän pension), which comes from money paid in tax, and makes up the biggest part of most people’s total pensions. It falls under the remit of the Pensionsmyndigheten or the Swedish Pensions Agency, a government authority dedicated to, you guessed it, pensions.

Absolutely everyone who has worked and paid tax in Sweden is entitled to this pension, and it’s split into two parts: an income pension and a premium pension.

The income pension (inkomstpension) makes up the bulk of this. Each year, 16 percent of your income is paid into this pension. In this context, ‘income’ includes wages as well as all other taxable benefits such as paid sickness or parental leave, and unemployment benefits.

It’s the employer who pays this, as part of the fees associated with employment, so you won’t see it deducted from your salary and there’s nothing that you as an employee need to do. The higher your salary, the higher the income pension will be, although once you reach the upper limit on pensionable income, your state pension won’t increase any further. This limit is regularly adjusted but is set at 51,208 kronor per month for the income year 2024, or 614,500 kronor a year.

On top of the income pension, a further 2.5 percent of your income goes into investment funds (the premium pension or premiepension). Again, this is paid by the employer, but if you want to, you can choose which funds your money goes into. If you do not make a choice, your money will be invested in AP7 Såfa, the Seventh AP Fund (National Generation Management Option) which is the default option.

If you do want to move your funds, this can be done as often as you want, for free, by logging into the Swedish Pensions Agency’s website using BankID. You can have up to five funds at the same time, and there is a list of all the available funds on the website, which also offers advice on factors to bear in mind when selecting which ones to put your money in.

However, bear in mind that the premium pension is only equivalent to 2.5 percent of your income, so if you’re feeling overwhelmed, it’s more beneficial to focus on maximising your occupational and private pensions than the premium.

Those who live on a low income or no income while in Sweden may also be entitled to a so-called guarantee pension (garantipension) once you retire, which ensures you get a basic minimum pension regardless of your salary status while working. 

It is also calculated on the assumption that you lived in Sweden for at least 40 years (though there are special rules for those who arrived in the country as refugees), so if you live in Sweden for less than that, you’ll receive a smaller proportion. You have to have lived in Sweden for at least three years to receive it at all.

The guarantee pension can be collected from the age of 66 (before 2023 it was from the age of 65). This is the one component of the pension which you may not have access to if you later move abroad; as of 2023 Sweden no longer offers the guarantee pension to people who move abroad.

Overall then, the amount you receive as state pension is impossible to calculate in advance, and will depend on: your salary, which other benefits you receive, how long you work in Sweden, and when you start drawing your pension.

For context, the average general pension of people living in Sweden was 14,400 kronor before taxes per month in 2022, and made up around three quarters of the average person’s entire pension, but if you spend a large part of your working life in a country other than Sweden, that amount will be smaller.

After the state pension, the second potential component of the Swedish pension comes from your employer and is known as the occupational pension (tjänstepension). This will typically make up between 20 and 30 percent of your Swedish pension, but for high earners may be considerably more.

Most employees (90 percent, according to figures from the Swedish government) are entitled to some form of occupational pension, but exactly what this includes varies from workplace to workplace. Make sure to speak to someone from your workplace or trade union, if applicable, to ensure you understand what you’re getting. Be aware also that some companies have a lower age limit at which they start paying occupational pensions, or may pay different amounts for employees of different ages. 

In many workplaces, pension arrangements are decided based on agreements between unions and employers known as “collective agreements” (kollektivavtal). There are four main occupational agreements in Sweden, so find out which, if any, your workplace belongs to. 

If you have a collective agreement, the usual situation is that 4.5 percent of your salary up to a monthly ceiling will be paid into your occupational pension. In some cases, the employee has the option to choose which funds their pension is invested in, so you may be able to move your funds around, as with the premium pension.

In some sectors, there are no collective agreements, and in that case it’s up to the employee to negotiate an occupational pension with their employer – which they are not obliged to offer. 

If you’re self-employed in Sweden, or don’t have an occupational pension, you may choose to make individual contributions to compensate. As a rough guide, it’s a good idea to save around 4-5 percent of your monthly salary. And if you run your own business, you can make your own contributions towards an occupational pension, called owner’s contributions.

The third source of pension money is a private pension (privat pension), which you can set up if you want to put some of your own money towards retirement. There are various ways to do this: a private pension fund through a bank; a capital insurance fund (kapitalförsäkring); or by investing in stocks, property, or other assets. If you’re not planning to stay in Sweden long-term, it may well make sense to keep these savings in another country, if possible.

Look out for this orange envelope in your mail box. Photo: Fredrik Sandberg/TT

So, how do you keep track of these different funds? In Sweden this is actually really easy.

Each spring, you’ll receive a bright orange envelope from the Swedish Pensions Agency, which provides a breakdown of how much you’ve saved for your state pension so far, as well as a forecast of how much you’ll be able to withdraw when you retire, based on current data.

Plenty of Swedes dread or ignore the arrival of the envelope, but it’s useful to familiarise yourself with the information. You can also check the status of your state pension at any time by logging onto the “Mina Sidor” (My pages) section of the Swedish Pensions Agency’s website.

Be aware though that this is only a rough estimate, and the further from retirement you are, the less accurate it is, since the factors that determine pension amounts change regularly. It’s also calculated on the assumption that you’ll live and work in Sweden for at least 40 years, meaning the estimates are generally much higher than the real amount many immigrants will receive.

If you want to review all three parts of your pension – state, occupational, and private – you can check this online at Minpension.se, a website run by the Swedish government and pension companies. This is also helpful if you’re unsure whether your previous employers in Sweden had occupational pensions. Be aware that a small proportion of pensions won’t be visible through the website, but according to the site, 90 percent of people should be able to see their full pension.

Knowing that the money’s there is all well and good, but many international residents will wonder what they need to do now to ensure they actually get it when the time comes.

You can choose to start taking your Swedish pension at any time after the age of 63, and this is set to rise further over the next few years. You can draw 25, 50, 75, or 100 percent of your pension each month, so if you choose to continue working but reduce your hours, for example, you might opt to take out a smaller amount.

Those who retire outside Sweden, or leave the country long before retirement, are still entitled to any pension earned while working in Sweden (apart from the guarantee pension, as mentioned above). You do not have to have Swedish citizenship in order to claim it, but you do have to actively apply for the pension. This is because it’s up to you when you start receiving it.

When you leave Sweden, contact the Swedish Pensions Agency to inform them of your new address so that you will continue to receive statements and notifications. Make sure to keep them updated each time you change address.

If you retire in the EU/EEA, or another country with which Sweden has a pension agreement, you just need to apply to the pension authority in your country of residence in order to start drawing your Swedish pension. If you live in a different country, you should contact the Swedish Pensions Agency for advice on accessing your pension, which is done by filling out a form (look for the form called Ansök om allmän pension – om du är bosatt utanför Sverige).

The agency recommends beginning the application process at least three months before you plan to take the pension, and ideally six months beforehand if you live abroad. It’s possible to have the pension paid into either a Swedish bank account or an account outside Sweden.

Once you start withdrawing the Swedish pension abroad, you may also be sent a life certificate (levnadsintyg) each year. These are sent to pensioners in countries from which Sweden’s Pensions Agency and Social Insurance Agency don’t receive information automatically, to confirm that the recipient is still alive.

Life certificates are sent out to those receiving Swedish pensions each summer, and can also be downloaded from the Pensions Agency’s website. They must then be approved by an authority such as local police, social insurance, or Swedish embassy, and returned to the Pensions Agency by post or e-mail.

In summary, here’s your checklist to make sure you’re on track for a healthy Swedish pension:

  • Get online to check how much you’ve accumulated so far
  • Speak to your employer about your occupational pension, and find out if there are any decisions you can make relating to it
  • If you’re self-employed or don’t have an occupational pension, consider setting up private savings to compensate
  • Decide if you want to change the funds your premium pension and (if applicable) occupational pension are invested in
  • Think about whether you want to set up additional private pension savings
  • Keep the Swedish Pensions Agency informed about your address if you leave the country
  • Get in touch with the Swedish Pensions Agency (or, in the EU/EEA, your local pensions authority) six months before you hope to draw the pension

Member comments

  1. Very good article… hopefully you will publish more guides of this sort… for example how to manage housing contracts (it might be there already… but it would be good if there is a page menu focused specifically on guides and FAQs)

  2. Great information!!
    My husband and where always wandering what could we do about pension.
    This article explains a lot.
    Thank you!

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MY SWEDISH CAREER

My Swedish Career: ‘I went freelance and don’t regret it for a second’

Irish journalist, author and former musician Philip O’Connor managed to start off his career in journalism by 'shooting at the moon'. He has since been creating a digital footprint for those with links to Ireland and setting up community events in Stockholm.

My Swedish Career: 'I went freelance and don't regret it for a second'

When Philip walked into one of his favourite restaurants in Märsta, feeling nervous and somewhat guilty since he was going in to ask for a job, it went better than anticipated.

“I went in one night to ask for a job. I had been in there before, and I was kind of friendly with the two sons. I kind of felt embarrassed going in there and asking for a job because it really was the last chance saloon for me.”

But he didn’t even have to ask for the job himself.

“The eldest son said, ‘Oh, here, here’s a beer. I’ll be right back to you in a second’ and I went in there with my tail between my legs. He came out and said, look, normally I wouldn’t ask but I am desperate for somebody to work here. Could you possibly consider walking a few shifts here? I said ‘ah yeah, I’ll do you the favour’,” he tells The Local, laughing.

When Philip first arrived in Sweden in 1999, guitar in hand, he thought that a new country and atmosphere would give him the chance he needed to go further with his music career. However, a new issue appeared. One night when he got on stage he just froze.

“I went there to play in O’Connor’s pub out in Uppsala on the square and for the first time in my life, I got stage fright. I was standing there, and I didn’t understand what it was until years later.”

As he continued to work in the restaurant, his passion for creativity was still in the back of his mind.

With the experience he had writing for music magazines and working in local radio in Ireland, he started to apply for work in media companies. However, that proved to be more difficult than expected. Having gone through a long list of potential media outlets that could take him on for either work placement or for work, he received nothing back.

“There’s a big difference between Ireland and Sweden in terms of, in Ireland, if you have the gift of the gab, if you have the ability to talk your way into situations, you don’t need pieces of paper or anything else like that. If you just, fake it till you make it kind of thing, that works. That didn’t work in Sweden.”

CAREER TIPS:

He then took the opportunity to do an IT course at Komvux, Sweden’s adult education centre, which he used as a backdoor to get into the job he really wanted. Following the completion of that course, Philip, once again, set out to apply for jobs in media organisations and went through a long list. He had no luck until he got to the last name on the list, Reuters – the worldwide news agency.

“Talk about shooting at the moon. I sent off the email thinking, there’s absolutely no chance that these people are going to let me in the door.”

“About 10 minutes later, I got a phone call and they said, yeah, we need somebody to come in on work experience here to help out in the IT department.”

2002 and now working in the IT department with Reuters, it provided Philip with the perfect opportunity to work his way up. Just a few hours after starting his work experience, he was offered a part-time job with the company.

He went on to write a variety of articles within the IT department, which included, how to set up the computer, set passwords and how to store files. This then led him into writing news articles for the company.

“As long as you worked hard and you were in the right environment, people noticed, and I found that to be really refreshing. Because oftentimes you’ll find that you work hard and people either don’t notice or they don’t care or they’re happy enough for what you’re doing, and they just want to leave you there,” he says.

In 2006 he wrote sport-related articles for the news agency before later taking over the sports department at the end of the decade. This position was a freelance contract and required him to decide on whether to take it or not, but he jumped at the opportunity.

“The moment I was told here’s the sports, but it’s freelance, I said where do I resign. It was a case of going out the front door and coming in through the backdoor as a freelancer. So, I had to give up a sort of a permanent pensionable job with a company car to take a freelance contract and I don’t regret it for a second.”

READERS REVEAL:

After spending over two decades in Stockholm and continuing to work freelance, Philip now also spends his time trying to create a sense of community among the Irish population in Sweden.

Through his podcast, Irish In Sweden, he speaks to people with a variety of backgrounds, from those who are involved in the Irish societies in Sweden, to business owners, politicians and everyone in between. However, the definition of Irish is flexible, he explains, since there was a woman on the podcast who owns a bookstore in Gothenburg, but her parents are Irish.

“As long as those who have a story to share that would be of interest to the Irish listenership then they are welcome on the podcast,” he says.

Philip O’Connor runs the Global Gael and Irish in Sweden podcasts. Photo: Private

He created the podcast as a time capsule which captures the lives of those with Irish links living in Sweden, noting that Ireland lost all records dating before the 1840s, when the Public Record Office of Ireland was burned in 1922 during the civil war.

“Who are we as an Irish community, pass that along to the younger generations, and just for them to understand, the culture, the way we speak English, it’s quite unique. We have our own language as well. To pass on all those things, and that perspective and history.”

In October 2022, Philip expanded his podcast offering by creating a global stage for the Irish around the world. The Global Gael podcast offers the opportunity for those who have gone on to do a wide variety of things, from journalism to sport and actors to ambassadors.

Creating a sense of community in Stockholm, not only for the Irish, is another task he aims to complete. He is able to do this through teaching kids how to podcast, from planning and preparation to recording. He has also coached soccer as well as Gaelic games, a sport native to Ireland and a cross between soccer and rugby, and he teaches Brazilian jiu jitsu at least twice a week in Jakobsberg.

Along with that he mentors young journalists both in Sweden and around the world, through helping them develop and opening doors for them.

“Many of them would be from a similar background to me – usually with an immigrant background and coming from a non-academic home and without the natural networks that might exist for people whose families have previously been involved in media,” he says.

“These are often the kinds of people that aren’t heard in media, and their perspective is vital to understanding who we are as a society, and where we want to go.”

“All of these things, it’s community,” he says.

He says the podcasts aren’t only engaging for Irish people, but also for others thanks to the diverse selection of topics discussed and the people who he interviews.

“The podcasts are what I hope and believe will be what I end up doing long-term, but building an audience is like going into battle every day – it’s a very competitive sector and people only have so much time and attention! That said, it’s a great medium and harks back to where I started in community radio.”

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