Just 13 per cent of self-select savers in Sweden’s premium pension system have outperformed the default AP7 Såfa fund over the long term, a new report from the Swedish Pensions Agency (SPA) has found.

However, the report, Premium pension – Value development and payouts 2025, found that 2025 broke this pattern, as around half of savers who chose their own funds saw their investments perform better than the default option.

SPA analyst and author of the report, Gustav Sundén, said that the state-managed AP7 Såfa has performed well for the majority of savers.

“The year 2025 stands out compared with previous years. At the same time, long-term historical data shows that switching funds has rarely paid off. Only just over one in 10 people who have chosen their own funds have seen better returns than the default options in the premium pension scheme,” he said.

Furthermore, the report also showed a “clear correlation” between the number of fund switches and returns. For example, the more fund switches savers make, the poorer their average returns.

At the same time, the variation in returns is greater among savers who choose their own funds than among those who stick with the default option.

The report noted that last year, the way in which inheritance gains within the premium pension scheme were distributed was changed.

Instead of being distributed annually, they are now allocated monthly. This meant that inheritance gains, which would normally have been spread over two calendar years, were instead concentrated in 2025.

SPA said this change contributed to an unusually high increase in the value of pension pots, particularly for older pension savers and pensioners.

The report stated that the premium pension scheme has generally performed strongly over time. Since 2012, the average return has been well above the income index, which determines the performance of the income pension.

In 2025, the average return on the premium pension was 4.4 per cent. The adjustment to the income pension was 3.6 per cent in 2025.

“The premium pension scheme achieved its highest average return to date in January 2025 and has benefited from strong performance on the stock markets since the scheme was introduced,” Sundén added.

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