Study finds additional ‘pension cost’ to Swedish students graduating later in life

Swedish graduates could be required to save an additional SEK 1,800 a month throughout their career in order to obtain their desired pension sum, a new study by Skandia has found.

The report, titled Akademikernotan, mapped expected pension sums for students today.

It highlighted that as young people in Sweden continue to study for longer, final pensions could be substantially impacted, particularly compared with those students graduating at an earlier date.

Swedish students could be hit with a major ‘pension cost', according to Skandia pension economist, Mattias Munter: “Sweden needs a well-educated workforce and education is both career and pensions-positive for many. However, many people wait too long to graduate. Our report shows that there is a pension cost if you start your career too late.”

“Those who do not save on their own to compensate may have to work past their 70th birthday to be satisfied with the pension they have,” he added.

According to data from the OECD, students in Sweden spend more time in education than in many other countries across Europe, and the trend does not seem to be slowing down.

Increasingly, young people across the country are spending more time in education, delaying pension investing until later life.

The Skandia report found those entering the work force later, typically around the age of 26 or beyond, lose out on approximately SEK 2,800 a month in pension contributions, compared with earlier graduates.

According to the report, recent graduates need to save substantial additional sums each month in order to receive 80 per cent of their final salary pension, the most desired outcome, according to a Skandia poll.

“For both society and the individual, there is much to be gained from trying to lower the age at which people can start their degree,” said Munter.

The report analysed seven professions and their graduates including nursing; law, teaching, economics, social secretary professionals, primary school teaching and civil engineering.

Findings indicated those graduating later will require access to additional savings of between SEK 1,600 and SEK 2,000 per month throughout their working life to reach their final salary pension goal.

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