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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: Fredrik Sandberg/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 47,717 kronor per month for the income year 2022 ($5,094 in February 2022) and was 45,833 kronor per month for the income year 2021.

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. 

This is the one component of the pension which you may not have access to if you later move abroad; you will only keep it if you move to an EU/EEA country, Switzerland, or in certain cases Canada, and you’ve lived in Sweden for at least three years before the age of 65.

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.

The guarantee pension can be collected from the age of 65, but that age is set to rise over the next few years (this also applies to the age from which you can collect other kinds of pension).

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 expats 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 62, 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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For members

WORKING IN SWEDEN

CHECKLIST: Here’s what you need to do if you move away from Sweden

What authorities do you need to inform before you leave, are you liable to Swedish tax and how can you access your Swedish pension? Here's a checklist.

CHECKLIST: Here's what you need to do if you move away from Sweden

Tell the relevant authorities if you’re leaving for more than a year

If you’re planning on leaving Sweden for more than a year, you will have to let the authorities know. The main authorities in question are Skatteverket (the Tax Agency) and Försäkringskassan (the Social Insurance Agency).

Försäkringskassan

You have to tell Försäkringskassan when you leave so they can assess whether or not you still qualify for Swedish social insurance. As a general rule, you aren’t eligible for Swedish social insurance if you move away from Sweden, but there are exceptions, such as maternity or paternity benefits if you’re moving to another EU country.

This also applies to any family members who move with you – any over-18’s should send in their own documentation to Försäkingskassan about their move abroad. If you’re moving abroad with anyone under 18, you can include them in your own report to Försäkringskassan.

If both legal guardians are moving abroad together, both need to include any children in their application. If one legal guardian is moving abroad and the other is staying in Sweden, you need the guardian staying in Sweden to co-sign your application. If you are the sole legal guardian of any under-18’s travelling with you, you don’t need any documentation from the other parent.

You can register a move abroad with Försäkringskassan on the Mina sidor service on their website, here (log in with BankID).

Skatteverket

If you are moving abroad for a year or longer, you also need to tell the Tax Agency. This also applies if you were planning on moving abroad for less than a year but ended up staying for longer.

If you move to another Nordic country, you will also need to register your move with that country’s authorities if you will be there for six months or more. You’ll be deregistered from the Swedish population register the same day you become registered in another Nordic country’s register.

This doesn’t mean that you’ll lose your personnummer – you’ll still be able to use it if you ever move back to Sweden – but you will no longer be registered as resident in Sweden.

Similarly to Försäkringskassan, you will also need to report any children you are bringing with you, and both legal guardians must sign the form, whether or not both guardians are moving abroad or not.

In some cases, you may still be liable to pay tax in Sweden even if you live abroad – particularly if you are a Swedish citizen or have lived in Sweden for at least ten years. This could be due to owning or renting out property in Sweden, having family in Sweden, or owning a business in Sweden.

You can tell the tax agency of your plans to move abroad here.

Contact your a-kassa, if relevant

If you are member of a Swedish a-kassa (unemployment insurance), make sure you tell them that you’re leaving the country. As a general rule, you have unemployment insurance in the country you work in, so you will most likely have to cancel your a-kassa subscription.

If you are moving to another country with the a-kassa system, such as Denmark or Finland, it may pay to wait until you have joined a new a-kassa in that country before you cancel your membership in Sweden.

This is due to the fact, in some countries, you only qualify for benefits once you fulfil a membership and employment requirement. In Sweden and Denmark, you must have been a member for 12 months before you qualify. In Finland, the membership requirement is 26 weeks.

If you qualify for a-kassa in Sweden before you leave the country, you may be able to transfer your a-kassa membership period over to your new a-kassa abroad and qualify there straight away, but this usually only applies if your period of a-kassa membership is unbroken.

Check what applies in your new country before you cancel your membership in Sweden – your a-kassa should be able to help you with this.

Contact your union, if relevant

Similarly, if you are a member of a Swedish union or fackförbund, let them know you’re moving abroad.

If you’re moving to another Nordic country, they might be able to point you in the direction of the relevant union in that country, if you want to remain a member of a union in your new country.

If you’re moving to another EU country, you may be able to remain a member of your Swedish union as a foreign worker with the status utlandsvistelse.

If you chose to do this, you will usually pay a lower monthly fee than you do in Sweden, and they can still provide assistance with work related issues – although it may make more sense to join a local union in your field with more knowledge of the labout market.

If you don’t want to be a member of a union in your new country and don’t want to be a member of a Swedish union, you should contact your  union and ask them to cancel your membership.

Collect relevant documents regarding your Swedish pension

If you have worked in Sweden and paid tax for any length of time, you will have paid in to a Swedish pension. You retain this pension wherever you move, but you must apply for it yourself.

To do so, you will need to give details of when you lived and worked in Sweden, as well as providing copies of work contracts, if you have them. If you have these documents before you leave Sweden, make copies so that you can provide them when asked.

If you move to the EU/EES or Switzerland, you may also have the right to other, non-work based pensions, such as guarantee pension for low- or no-income earners, or the income pension complement (inkomstpensionstillägg).

Currently, you can receive your Swedish pension once you turn 62 – although there is a proposal in parliament due to raise pension age to 63 for those born after 1961 from 2023, so this may change.

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