Bosse Hansson, deputy leader of the Ambition Sverige party, says that your pension and retirement should be a reward for a lifetime of hard work, but unfortunately pensioners are not benefiting from the growth in their pension capital and are therefore not receiving the pension increases they should be entitled to.

Hansson says that it takes a long time to change the pension system, but that what can be done in the short term is to raise the basic deduction for pensioners, so that they receive much more from their pension than today.

The quickest way to tackle the problem is to increase the basic allowance. The Ambition Sverige party wants to raise the basic allowance to two price base amounts, which means that the first 10,000 kronor of the monthly pension will be tax-free.

This means that the vast majority of pensioners will receive an extra 2,100 Swedish kronor in pension after tax each month. This can be financed by cutting the number of government agencies in Sweden and also by discontinuing foreign aid.

Torbjörn Sassersson asked Hansson what he would recommend younger people, those in their thirties and forties now, to consider in order to get a good pension.

Bo Hansson:

”Above all, they should think about saving themselves, individually in private equity funds. Start saving early. It builds your capital, your own capital in the long run, and that's where you'll get a decent life from.”

Hansson continues by pointing out that today's income pension system is not actually your own capital, but a claim on a payment that the state has full control over.

”Save privately instead and start early. This builds capital so that you have a more bearable future.”

Torbjörn Sassersson: Are you talking about pension funds or your own savings?

Bo HanssonAmbition Sverigeanswers that it doesn't matter, but rather that it's about saving in something you feel comfortable with. He recommends equity funds, preferably index funds that have the lowest fees in the long term. ”That's the winning concept.”

Torbjörn Sassersson: If we take those who are furthest from retirement, the twenty-year-olds who have just entered working life, do the same principles apply to them, or should they think in a particular way?

Bo Hansson:

”Yes, fundamentally the same principle applies, but when you're twenty and before you're thirty, there are so many other circumstances and costs.”
”I didn't save separately for my pension before I was thirty, so I have complete sympathy for that, but at least as soon as you pass thirty, you should start thinking about saving yourself, individually in some index fund for your own pension future.”

Interview and compilation: Torbjörn Sassersson

The Swedish income pension system should provide pensioners with better pensions. Instead, large parts of the pension capital have been used to fill holes in the treasury and to invest in risky, green climate projects.

Ambition Sweden wants to make the income pension more self-financed and raise the basic deduction substantially - to two price base amounts - so that pensioners could get the reward for their work that they should be entitled to.

The pension contribution to the inkomstpension is the employee's savings for their own pension. Each month, a salary-based sum is set aside and the capital is then managed primarily by the AP funds' portfolio managers - but then politics comes in.

The income pension capital of the AP funds is growing with the return on the funds' securities investments, but the actual return does not benefit pensioners - because the amounts paid out in pensions are determined by a given formula based on an income index and not on the return itself.

During the period 2001-2024, the inkomstpension capital of wage earners grew on average by about 6.3 thousand tp3 per year. What was paid out to pensioners increased by an average of 3.11 TPA3 per year. The difference between the two? It stayed in the buffer funds and could be used for policy initiatives.

Premium pension, measured on the basis of AP7's Såfa fund, grew over the same period by an average of +7.8 % per year. The difference is due to a higher share of equities but also the absence of politically driven investments in utopian green projects such as Northvolt - which cost pensioners nearly SEK 6bn. The premium pension provides higher earnings, which in turn increases pensions.

Ambition Sweden wants the self-owned premium pension share in the income pension system to increase to at least half of the 18.5 % set aside for pension each month. Today, 2.5 % of the 18.5 % is allocated to the premium pension. With half in premium pension, both the pension capital would grow more and the risk of large losses in politically controlled green risk investments would decrease.

Since the change to increased premium pension would probably take a few years to implement, Ambition Sweden also wants to implement a faster income improvement for pensioners. When you look around among other countries, it turns out that Germany, for example, has a significantly higher basic deduction (Grundfreibetrag EUR 12,096 for single people, equivalent to about SEK 132,000) for pensions. Sweden should be closer to this and therefore it is reasonable to increase the basic deduction for pensions.

Increasing the basic deduction on pension income to two (2) price base amounts - instead of the current increased SEK 65,300 for low incomes, would increase pension income by almost SEK 1,500/month after tax. Such an upward adjustment makes a real difference and could be implemented quickly, if the political will exists.

Thus, Ambition Sweden wants to make the general income pension more owner-occupied and substantially increase the basic deduction - then Swedish pensioners will get their rightful reward for their work.

Bo Hansson

Pension policy spokesperson and deputy party leader | Montage of photos from Depositphotos.com and NewsVoice