Average Swedish pensioner receives 75% of pre-retirement income

The average Swedish pensioner receives 75 per cent of their pre-retirement income, according to new analysis by Alecta.

Using data from Statistics Sweden, Alecta analysed the income of three million Swedes aged between 55-85 years old, broken down into separate cohorts. It found that pensioners’ income has increased between each age cohort.

The first part of the study compared the income development for five cohorts born between 1941 and 1953. The study found that each of the cohorts has higher incomes than the cohort before them.

Alecta pension economist, Staffan Ström, said: “The study shows that pensioners' income is clearly better than what has previously been the case, and contrary to what many believe, their income has also increased over time.

“Some of the reasons for this are that more people now have the health to work until retirement, that more and more people choose to continue working after 65 and that occupational pensions have delivered strongly. The Swedish pension system is far from perfect, but the gloomy picture many have of a system that is collapsing is simply not true.”

In regards to the average replacement rate of 75 per cent, Alecta noted this is significantly higher than the often quoted 60 per cent mentioned in pension debates.

It is also noteworthy that the income development is not worse for cohorts who mainly receive their pension from the new pension system than for those who mainly receive their pension from the old ATP system, Alecta said.

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