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READER QUESTIONS

Ten key questions to help you plan your Swedish pension now

Pension-planning is an important part of keeping on top of your personal finances, and that's true whether you've moved to Sweden for the long haul, plan to stay for just a few years, or are choosing to retire to the Scandinavian country.

Published: 8 February 2020 07:46 CET
Updated: 20 February 2024 11:21 CET
two women discussing over a laptop
Don't miss out on maximising your Swedish pension. Photo: Lieselotte van der Meijs/imagebank.sweden.se

How many parts is your Swedish pension divided into?

Your pension, or the money you receive once you stop working, comes from three sources: the state, your employer, and any private pensions accounts you have set up yourself.

Everyone who spends time living and working in Sweden is entitled to the state pension, which itself is made up of two parts. A total of 16 percent of your taxable income is paid into your “income pension”, while a further 2.5 percent goes into funds. It’s the employer who pays this, and as an employee there’s nothing you need to do about it (the fee is fixed and it’s obligatory for employers to pay it) other than knowing that it’s there.

The occupational pension is also paid by the employer and is offered to most employees in Sweden, but the amounts vary. And the private pension is the third source, which you might set up through a bank, a capital insurance fund, or other forms of investment.

Is there an upper limit on pensionable income?

The higher your salary, the more money you’ll get in your state pension and occupational pension. But there is an upper limit. Your pensionable income includes your wages as well as all any other taxable benefits you receive in a given year such as paid sickness or parental leave.

But beyond an upper ceiling, you won’t receive any more money into your state pension. This limit is regularly adjusted but is set at 51,208 kronor per month for the income year 2024 and was 49,938 kronor per month for the income year 2023.

Do most workers have an occupational pension?

The majority of employees in Sweden will receive an occupational pension. In workplaces with a collective agreement, it’s common for 4.5 percent of your salary to be put into this pension pot. 

Workplaces without a collective agreement aren’t obliged to offer an occupational pension, but many do. As an employee, it’s important to speak to your manager or HR representative to find out the system at your company. Ideally, you should do this early on, and you might choose to negotiate a higher pension rate at the same time as you negotiate your salary.

When it comes to withdrawing your pension, be aware that some occupational pensions are paid out automatically but others need to be applied for.

Do you get a say in how your pension is saved?

This is another reason why it’s important to keep good track of your pension; not only so you’re aware of how much you’ve got, but because you can actually influence how and where it’s saved. 

In many cases, it’s possible to move funds for your occupational pension around. Again, this is something you can speak to your manager or HR department about.

And as well as the occupational pension, 2.5 percent of your state pension (this section is known as the premium pension) goes into investment funds. It’s the employer who pays this, but you can choose which funds your money goes into. If you don’t want to choose, your money will be invested by default in AP7 Såfa, the Seventh AP Fund (National Generation Management Option).

Will you get sent annual updates on your pension status?

Yes, but the further away from retirement you are, the less likely these are to be accurate.

Each spring, Swedish residents receive a bright orange envelope in the post, with information about the amounts in their pension pots and an estimate of how much you’ll be entitled to after retiring. These calculations are done on the assumption that by retirement you’ll have lived and worked in Sweden for at least 40 years, so for people who moved here as adults they are unlikely to be accurate.

If you want to keep track of your pension though, there’s no need to wait for this yearly reminder. You can log on at Minpension.se, a website run by the Swedish government and pension companies.

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

Are you entitled to your Swedish pension even if you move abroad?

If you choose to retire to a different country, or if you leave Sweden before retiring, you can still claim any pension earned while working in Sweden. This applies whether or not you have Swedish citizenship.

Several countries have pension agreements with Sweden, including all EU/EEA countries, the US, UK, India and Canada (find a full list here). In those countries, you can apply to the pension authority of your country of residence to start drawing your Swedish pension. If you live in a different country, you need to apply to the Swedish Pensions Agency directly for advice.

From 2023 Sweden no longer offers the guarantee pension to people who move abroad.

Can you receive a ‘survivor’s pension’ if a deceased family member had a Swedish pension?

If your spouse or parent lived or worked in Sweden, in some circumstances you can apply for a survivor’s pension, even if you have never spent time living or working in Sweden yourself. The process is the same as above: in countries which have a pensions agreement with Sweden, contact the pension authority there, and in other countries, contact the Swedish Pensions Agency.

Does Sweden offer a state pension to those who lived on low or no income?

If you retire in Sweden after living on a low income or no income at all, you may well be entitled to what’s called a guarantee pension. Currently, this can be collected from the age of 66.

The guarantee pension is calculated on the assumption you spent 40 years living in Sweden, so if you’ve lived in Sweden for a shorter time than this, you’ll be entitled to a smaller amount.

In order to receive this pension, you need to have been resident for at least three years, and the amount you receive is reduced by one fortieth for every “missing” year. So if you’ve lived in Sweden for 23 years, your guarantee pension would be reduced by 17/40. Exceptions are made for people who arrived in Sweden as refugees.

Is there a fixed retirement age?

You can start drawing your pension from the age of 63 if you wish, although this is set to change in 2026.

There’s no upper limit, and you have the right to keep working until the age of 69. But in theory, you can keep working and earning towards your pension without starting to draw it for many years after this, as long as you agree to that with your employer.

Can you claim overseas pensions in Sweden?

For internationals who choose to retire in Sweden, the biggest concern might be ensuring that their foreign pensions can be moved to their new country. Years spent working outside Sweden mean a loss in both Swedish state and occupational pension, but if you’re in a country that has a pension agreement with Sweden, you just need to inform the Swedish Pensions Agency that you’ve worked in those countries.

You’ll usually need to give details about the countries you’ve worked in, time spent in each one, and your national insurance number in those countries in order to access your state pension.

If you have private or occupational pensions overseas, you’ll need to get in touch with the relevant banks or funds in order to find out how to transfer these to Sweden.

And this also applies to state pensions earned while working in countries without a pension agreement with Sweden; you’ll need to contact the authorities in those countries to find out if and how you can access your pension.

This article was first published in March 2019, and updated in February 2024.

Member comments

  1. Is there a minimum amount of years one needs to work in Sweden before one can be eligible for Pension that he/she has accrued?

  2. If you ever leave Sweden, keep Pensionsmyndigheten informed of your foreign address. I left Sweden in 1992 after about five years. I spent a couple of decades unaware that I might be entitled to a Swedish pension. On a whim, I checked, and discovered that I had an allmänpension and a tjänstepension coming to me. They didn’t have my address so I might have missed out if I hadn’t called. I just turned 65 and every month about $225 US dollars will be dropping into my bank account.

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For members

WORKING IN SWEDEN

Half of those blocked by Sweden’s work permit salary threshold will be graduates

A new analysis by the Confederation of Swedish Enterprise has found that 51 percent of the labour migrants likely to be blocked by a new higher salary threshold will be graduates. Karin Johansson, the organisation's Deputy Director General, told The Local how this will hurt businesses.

Published: 22 April 2024 14:21 CEST
Half of those blocked by Sweden's work permit salary threshold will be graduates

When Migration Minister Maria Malmer Stenergard received the results of a government inquiry into setting the median salary as the threshold for new work permits, she said that highly qualified foreign workers would not be affected. 

“This is an important step in our work to tighten requirements for low-qualified labour migrants and at the same time to liberalise and improve the rules for highly qualified labour migration,” she said. “Sweden should be an attractive country for highly qualified workers.” 

But according to the confederation’s new analysis, published last week, graduates will in fact make up the majority of those blocked from coming to Sweden, if the government increases the minimum salary to be eligible for a work permit to 34,200 kronor a month from the 27,400 kronor a month threshold which came into force last November. 

“The politicians’ argument does not hold up,” Johansson told The Local. “More than 50 percent of those who have this kind of salary are skilled workers with a graduate background. These are the people that that the government has said that they really want to have in Sweden. So we are a little bit surprised that they are still going to implement this higher salary threshold.” 

Of those earning between 80 percent of the median salary (27,360 kronor) and the median salary (34,200 kronor), the study found that 30 percent were working in jobs that required “extended, university-level competence”, and a further 21 percent in jobs requiring “university-level education or higher”. 

“They are technicians and engineers, and many of the others are also really skilled workers that are hard to find on the Swedish labour market at the moment,” Johansson said. 

The proposals made by inquiry were put out for consultation in February, with the Confederation of Swedish Enterprise planning to submit its response later this week. 

Johansson said that further raising the threshold risked exacerbating the serious labour shortage already suffered by Swedish companies. 

"In our recruitment survey, we have discovered that 30 percent of all planned hires never get made because companies cannot find the right people," she said. "Many companies are simply having to say 'no' to businesses. They can't expand. So, of course, it will have an impact on the Swedish economy if they now increase the salary threshold. We know that there will be fewer people coming from abroad to work in Sweden." 

Johansson said she had little faith in the exemption system proposed by the inquiry, under which the the Swedish Public Employment Service will draw up a list of proposed job descriptions or professions to be exempted, with the Migration Agency then vetting the list before sending it on to the government for a final decision. 

"The decision of who will be exempted will be in some way a political one, and in our experience, it's the companies that know best what kind of people they need," she said. "So we are not in favour of that kind of solution. But, of course, it's better than nothing." 

She said that companies were already starting to lobby politicians to ensure that the skills and professions they need to source internationally will be on the list of exemptions, a lobbying effort she predicted would get only more intense if and when the new higher salary requirement comes into force next June.  

"If you have a regulation, not every company can have an exemption. You need to say 'no' sometimes, and that will be hard for companies to accept," she predicted. "And then they will lobby against the government, so it will be messy. Certainly, it will be messy." 

Although there are as yet no statistics showing the impact of raising the minimum salary for a work permit to 80 percent of the median salary last November, Johansson said that her members were already reporting that some of their foreign employees were not having their work permits renewed. 

"What we are hearing is that many of the contracts companies have with labour from third countries have not been prolonged and the workers have left," she said. 

Rather than hiring replacements in Sweden, as the government has hoped, many companies were instead reducing the scale of their operations, she said. 

"The final solution is to say 'no' to business and many companies are doing that," she said. "If you take restaurants, for example, you might have noticed that many have shortened their opening hours, they have changed the menus so it's easier with fewer people in the kitchen. And also shops, the service sector, they have fewer staff."

To give a specific example, she said that Woolpower, a company based in Östersund that makes thermal underwear, supplying the Swedish Armed Forces, had been struggling to recruit internationally. 

"They have seamstresses from more than 20 different countries and it's more or less impossible to find a seamstress in Sweden today," she said. "It's really hard for them to manage the situation at the moment and they are a huge supplier to Swedish defence." 

She said that the new restrictions on hiring internationally were also forcing existing employees and also company owners to work harder.  

"Current employees need to work longer hours than they have done and if you're a small business, you, as an owner, will work more than you have done before," she said. 

The best solution, she said, would be to abolish the salary thresholds and return to Sweden's former work permit system, which required that international hires receive the salary and other benefits required under collective bargaining agreements with unions. 

But she said that the government's reliance on the support of the Sweden Democrats party, enshrined in the Tidö Agreement, meant this was unlikely to happen. 

"This is the result of the Tidö Agreement, and you if you take away one single piece of this agreement, I think maybe everything will fall apart. So I think it's hard. When we discuss this with the different parties, they all agree that they want to push ahead with it. But it's the Sweden Democrats who put this on the table when they made their agreement." 

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