Sweden’s government has decided to introduce more flexible rules for the payment of occupational pensions — following agreement on the issue by the cross-party pensions group last October.

During the first five payment years, it will be possible for individuals to pause payments and extend the payment period, according to an announcement from the ministries of finance and social affairs last week.

Elisabeth Svantesson, the Swedish finance minister, said: “Sweden’s pensioners should be able to choose how they want to set up their pension. The government is now enabling a more flexible withdrawal of the occupational pension.

“Now it is also important that the labour market partners and the insurance companies make a joint effort to make it work in practice,” she said.

While it is already possible to pause payment of the state pension in Sweden, the ministry said that in order to enable a more flexible retirement, it was important that a corresponding break could also be made with other forms of pension payments, such as occupational pension, private pension savings and survivor’s pension.

The proposed new regulations meant it would be easier and more advantageous for a pensioner to start working again without being financially affected by higher taxes due to their occupational pension, it said.

As the rules stand today, there is a so-called five-year rule under which the capital in a pension insurance contract or pension savings account may not be paid out for a shorter period than five years – and during that time, payments have to be made in the same or increasing amounts.

Anna Tenje, minister for the elderly and social insurance, said more and more people wanted to mix work with a pension, but it had not been possible to put occupational pension payments on temporary hold.

“With this change, it will be a win-win-win for the individual, employer and society,” Tenje said.

Under the new bill being proposed by the government, new regulations will enter into force on 1 January 2025.

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Rachel is IPE's Nordic correspondent. She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere. In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile

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