Individual Pension Savings

Voluntary insurance

• Persons without collectively bargained pensions, either employed, owning an incorporated company, or in private business can save for pensions in either traditional pension insurance or in individual pension savings (IPS).
• IPS is open to all persons but it is only the mentioned groups that are allowed to claim tax reductions on savings.

General finances

• Fully funded personal pension plans based on personal contribution payments and capital revenues.

Contribution payments

• Persons can provide contributions and decide upon the respective amount individually.
• For self-employed persons and employees without a pension through employment: the deduction for individual pension savings cannot exceed 35% of the wage nor a ceiling of ten times the ‘price base amount’ (SEK 473,000 in 2020).

State support & incentivising strategies

• Tax-deductions on contribution payments are only available for persons not covered by any occupational pension based on collective agreement.

• Private pension plan providers manage the funds and pay benefits directly to the person upon agreement. 

• Pension payments are available from the age of 55.

Pension payments

• Accumulated capital through contribution payments and investment yields, minus administrative costs/fees of pension plan provider.
• Pension payments must be paid for at least five years.

Taxation and social security contributions on pension payments

• Pension payments from IPS are subject to income tax.
• Pension payments are not subject to social security contributions.
• There is a standard tax on the yearly return on capital: approximately 0.5% of the pension capital is taxed with 15%, paid by the trustee.