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PENSION

Report: Swedish pensioners best off in Europe

As political parties battle it out for grey vote ahead of the upcoming elections by promising the largest tax cuts, a report by finance firm AMF shows that Swedish pensioners enjoy the best financial situation in Europe.

Even without the tax cuts, the situation for pensioner groups is improving with them suffering lower rates of financial deprivation than other groups in society.

The proportion of pensioners with low economic standards has fallen steadily since 2000, when it was about 7 percent. By 2007, the figure had fallen sharply to only 2 percent.

In the same time period, among the general population, the figure increased over the years from 8 percent to just under 15 percent, according to the Ministry of Health and Social Affairs.

“The group of pensioners is not so easy to describe,” said Gunilla Nyström, private economist at SEB. “Among them are older women who have not worked full-time and now live on social security and housing supplements.”

“At the same time, pensioners own a very large proportion of the Swedish people’s total wealth. As such, there are pensioners who in principle do not own anything and have very low incomes and there are pensioners who have a very good pension and significant assets.”

From an international perspective, Swedish pensioners are doing very well. According to a statement made in 2008 by AMF, Swedish pensioners and their Austrian counterparts actually had the best living conditions in Europe. Moreover, the Swedish pensioners were happier than the Austrians, according to the survey.

However, the Swedish National Pensioners’ Organisation (Pensionärernas riksorganisation, PRO) claims that pensioners have slipped behind – at least at the individual level.

According to a report by the PRO, the real wages of workers have increased by 40 percent over the past 15 years, while those of pensioners in principle has remained flat.

“This is a development that will not end unless something radical is not done,” said Maja Fröman, information director at PRO.

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NORWAY

Norwegian fury over Swedish tax mix-up

Outraged Norwegian pensioners living in Sweden have reported the head of the Swedish Tax Agency (Skatteverket) to the police after being asked to repay four years' worth of taxes, claiming the agency gave them bad information.

Norwegian fury over Swedish tax mix-up

“I’m a friendly, honest person and I feel like I’ve been steamrolled,” Norwegian pensioner Mona Jonsson told Sveriges Television (SVT).

Jonsson is among the estimated hundreds of Norwegian pensioners who have moved to Sweden in recent years, many of whom claim they were misinformed by the tax agency.

They say officials at the agency told them that that since their pensions were paid from Norway, they should also pay their taxes there.

Four years later, however, the Norwegian retirées have suddenly been hit with claims from the tax authorities that they now owe back taxes in Sweden.

Several of them told SVT that they have been forced to dip into their savings, with some citing fears they stood to lose their houses in order to pay their outstanding Swedish tax bills.

Egil Siira, a Norwegian who chose to spend his retirement in the northern Swedish town Vilhelmina, even has a letter from the Swedish Tax Agency stating that he was to pay tax only in Norway during the first four years of his stay in Sweden.

Several Norwegian pensioners subsequently did not pay taxes to Sweden during their first years here. But now the agency, along with the Swedish Enforcement Agency (Kronofogden), have said the Norwegian pensioners owe the Swedish state outstanding payments.

SVT reported that the likely root to this financial predicament could be that individual agency staff were unaware of a tax law reform affecting Nordic pensioners moving between the countries in the region.

Prior to 2009, taxes were indeed meant to be paid to the country from which pensions were paid. Following the revision, however, taxes are to be paid to the country of residence.

Despite written proof that at least one Norwegian citizen in Sweden was given the wrong information, the tax agency has refused to take responsibility for the mix-up.

“I don’t know what has been discussed in individual cases and can’t make any further statements,” agency legal expert Britt-Marie Hallberg-Eriksson told SVT.

“It is regrettable and a real shame if we’ve given incorrect information.”

Unable to get a sympathetic ear at the tax agency, irate Norwegians have reported tax agency head Ingemar Hansson to the police on suspicion of professional misconduct.

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