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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. This is especially true if you don't plan to stay in Sweden long-term. But don't let it fall off the radar; follow The Local's guide to manage and maximize your Swedish pension, even if you don't intend to stay here permanently.
If you're working and paying tax in Sweden, you're probably entitled to a pension. Here's what you need to know. Photo: Simon Paulin/imagebank.sweden.se
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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 come in very 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.
If you've worked and paid tax in Sweden, you should be entitled to a Swedish pension. Photo: Simon Paulin/imagebank.sweden.se
First, there's the state 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 upper ceiling was 41,359 kronor per month for the income year 2017, though