Pensions in Sweden

The components of the pension system

The Swedish pension system is comprised of several parts: the income-based pension, the premium pension and the guarantee pension. In addition, most people receive an occupational pension and some also have private pension plans.

The pension system is financially autonomous

The pension system follows economic growth and tolerates demographic changes. The system is stable in the long term - both financially and politically. Pensions are based on lifetime earnings. The retirement age is flexible. Both income-based and premium pensions can be drawn from the age of 61. They can be drawn wholly or partially. One can continue to work while drawing a pension.

The pension system is financially autonomous and completely separate from the central government budget. The pension system is stable because pension size is determined by average life expectancy and because income-based pension paid out and pension credits follow wage developments. Strong income growth means pensions will be higher, while poor income growth will correspondingly result in poor pension growth.

As a complement to the income-related old-age pension, basic protection is available in the form of a guarantee pension, which can be drawn from the age of 65.

Income-based pension

The income-based pension is the main part of the national pension system and is based on total earnings throughout life. The longer one works the higher pension one receives. This principle means that the value of all pension contributions  made during the course of working life  is equivalent to what we receive as pensioners in the form of our pension.

Pensionable incomes are wages as well as payments from social security and unemployment insurance systems. 18.5 per cent of an individuals pensionable income is set aside for their pension (16 per cent goes towards their income-based pension and 2,5 per cent towards their premium pension).

Premium pension

The premium pension is also based on lifetime earnings. The premium pension is funded, and everyone is free to choose which funds it is to be placed in.

Guarantee pension

Anyone who has not earned an adequate pension is guaranteed a top-up guarantee pension. This compensation is financed by the central government budget. The guarantee pension is index-linked. It increases in line with inflation and is linked to the price base amount calculated by Statistics Sweden.

Housing supplement for pensioners

Housing supplement for pensioners is an important part of basic social protection provided to pensioners with low pensions. Whether you are entitled to housing supplement for pensioners or not depends on your income, assets and housing costs.

You may also apply for housing supplement if you live in rental accommodation, tenant-owned housing, your own house or an old people's home. Housing supplement is applied for from the Swedish Pensions Agency. One must draw a whole pension and be over 65 to receive a housing supplement.

Survivor's pension

The survivor's pension includes income-related benefits in the form of a child pension, an adjustment pension and (during a transitional period) a widows pension, plus (under transitional regulations) a special survivors pension. In addition, basic protection may be provided to adult survivors in the form of a guarantee pension and to children in the form of a child survivors benefit.

Responsible agency

The agency responsible for pensions is the Swedish Pensions Agency.

Supervision

The Swedish Social Insurance Inspectorate is the supervisory authority responsible for the pensions area.