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PENSIONS

Swedish Social Democrats in last minute bid to end budget block

Sweden's ruling Social Democrats have proposed a compromise deal on pensions with the opposition, in a last-ditch attempt to break the spring budget deadlock.

Swedish Social Democrats in last minute bid to end budget block
Social securities minister Ardalan Shekarabi at a press conference on pensions. Photo: Claudio Bresciani/TT

If the opposition parties – the Moderates, Christian Democrats, Sweden Democrats and Liberals – agree to raise the guarantee pension to at least 10,000 kronor a month, the Social Democrats will remove the harshly criticised garantitillägg or guarantee pension supplement from their spring amendment budget, the Ministry of Social Affairs told the country’s TT newswire

Guarantee pensions – pensions offered to those who have had little or no income during their time in Sweden – currently stand at under 9,000 kronor a month.

Social Minister Ardalan Shekarabi has demanded that the opposition parties accept or deny the proposal by the end of Wednesday June 1st. 

The parliament’s pensions group, who will be debating the proposal, are due to meet twice on Wednesday – once in the morning and once around 5pm.

Shekarabi has further stipulated that the pensions increase must be valid from August 1st, even if the funds cannot be paid out until later in the year, retroactively.

Another reason for the rush to come to an agreement on pension policy is the fact that the garantitillägg is included in the government’s spring amendment budget, which will be debated in parliament next week.

The opposition parties, who have criticised the garantitillägg, have written a counter-proposal which could beat the government’s budget in parliament if the parties cannot come to an agreement on increasing pensions.

Their proposal would cost more – roughly 14 billion kronor compared to 9 million kronor for a guarantee pension supplement – but it would also give more money to pensioners with a higher income. The opposition proposes, among other things, to raise the guarantee pension, increase property supplement or bostadstillägg and lower tax for pensioners.

The garantitillägg was originally proposed by the Left Party, who insisted that it must be included in the government’s spring amendment budget in order for them to support Magdalena Andersson’s prime ministerial bid in November 2021. It is supported by the Social Democrats and the Green Party.

The Left Party have said that they are open to the government’s proposal to raise the guarantee pension instead of introducing a guarantee pension supplement, with their vice chairman Ida Gabrielsson telling TT that “it gives the same netto effect, roughly. It would be 1,000 kronor [more] after tax”.

The garantitillägg would give pensioners with an income of less than 11,000 kronor a month around 1,000 kronor extra per month, starting in August. Half a million pensioners would be affected, with the supplement decreasing for those with an income of between 11,000 kronor and 14,000 kronor.

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PENSIONS

How big is my Swedish pension pot? This orange envelope is about to tell you

Everyone who lives and works in Sweden will soon receive their so-called "orange envelope", the annual statement that reveals the size of your future Swedish pension.

How big is my Swedish pension pot? This orange envelope is about to tell you
It is not as intimidating as it may seem. Photo: Jennifer Glans/Pensionsmyndigheten

Sweden’s annual pension statement, which is usually simply referred to as “the orange envelope” (det orange kuvertet), was sent to pensioners in mid-January – and this month it started to drop into the mailboxes of everyone who has not yet retired.

You don’t need to do anything when you get it; it just contains information. But it is a good idea to keep on top of your future savings, whether you’re in Sweden for the long run or not. This article by The Local explains how to decipher your orange envelope.

It will be sent out to people in the following regions on the following dates:

February 14th-18th: Västmanland, Dalarna, Gävleborg, Västernorrland, Jämtland, Västerbotten, Norrbotten.

From February 17th: Rest of the world.

February 21st-25th: Stockholm.

February 28th-March 4th: Uppsala, Södermanland, Östergötland, Jönköping, Kronoberg, Kalmar.

March 7th-11th: Västra Götaland, Värmland, Örebro.

March 14th-18th: Skåne, Blekinge, Halland, Gotland.

In total, more than eight million orange envelopes will be sent out this year.

The average worker saved 57,900 kronor towards their general pension (allmän pension) in the past year, and currently has general pension savings worth 1,362,000 kronor. Here’s The Local’s guide to how to maximise your Swedish pension.

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