More poor people in Sweden than poor pensioners

Pensioners are not overrepresented in the group with the lowest incomes, Alecta's annual survey of Swedish pensioners’ financial situation has found.

Figures from Statistics Sweden, which Alecta analysed as part of its annual survey, found that young people have lower incomes than older people, while married people are overrepresented among those with the lowest after-tax income, not single people.

Alecta’s annual survey this year focused on 15 per cent of Swedes who, regardless of age, have the lowest income after tax, with the provider analysing people's individual income instead of measuring income at the household level.

The research also found that the largest group of Swedish people at risk of poverty was between 20-29 years old, but Swedish people at risk of poverty were found in all age groups.

In addition to this, among those on low incomes who are 30–50 years old, the research showed that they were on “really low” incomes, compared to the median income of low-income pensioners being “significantly” higher.

Women were also “clearly” overrepresented among those with low incomes, as one in five women was included in the group with the lowest income, compared to one in 10 men.

The analysis revealed that widows and widowers are not poorer than others and married people over the age of 67 are overrepresented among those with the lowest net income. The proportion was twice as large as among widows and widowers.

Alecta also explained that the Swedish public support system for the elderly works equally.

The analysis showed that they are significantly stronger than the basic protection that exists earlier in life, meaning the income in many cases increases at retirement for those who have been low-income.

Furthermore, the provider stated the public pension does not provide pension entitlement on high incomes, resulting in the spread between low- and high-income earners being smaller in the older population.

Commenting on this, Alecta pension economist, Staffan Ström, said: “Many people have the idea that pensioners are overrepresented among those with the lowest incomes, but that is actually not the case.

“And the common perception that the most disadvantaged pensioners are widows and single people is not true either. Instead, it is typically married pensioners who stand out by having the lowest after-tax incomes.”

Ström stated that when speaking about poverty in Sweden, the relative poverty measure of the low economic standard was usually used, based on the entire household's income.

“This way of measuring in many cases hides a person with a low income behind someone else in the household with a clearly higher one,” he continued.

“And since political efforts to reduce poverty are usually individual, the household measure becomes quite blunt. Many people can have a seemingly good economy because they live in two.”



Share Story:

Recent Stories


Podcast: Stepping up to the challenge
In the latest European Pensions podcast, Natalie Tuck talks to PensionsEurope chair, Jerry Moriarty, about his new role and the European pension policy agenda

Podcast: The benefits of private equity in pension fund portfolios
The outbreak of the Covid-19 pandemic, in which stock markets have seen increased volatility, combined with global low interest rates has led to alternative asset classes rising in popularity. Private equity is one of the top runners in this category, and for good reason.

In this podcast, Munich Private Equity Partners Managing Director, Christopher Bär, chats to European Pensions Editor, Natalie Tuck, about the benefits private equity investments can bring to pension fund portfolios and the best approach to take.

Mitigating risk
BNP Paribas Asset Management’s head of pension solutions, Julien Halfon, discusses equity hedging with Laura Blows

Advertisement