SWEDEN - Swedes born in the 1980s and 1990s can still expect receive a total pension income worth 60-65% of their final salary, yet this is substantially lower than those born in the 1930s and 1940s, according to a survey by pension provider Folksam.

Those born in 1938 will receive total pension income of 86% of their final salary and this will reduce to 81% for those born in 1942, according to the study.

Total pension income consists of state, occupational and private pensions. The survey, of nearly 340,000 Swedes, suggests total pensions for women in particular falls in value the later you are born. Women's pensions were reduced from 87% of final salary for those born in 1938, to 80% for those born in 1942, whereas the reductions for men born in the same years was from 85% to 82%.

According to the survey, the drop is a result of a lower state pension level, which has decreased from 61% to 54% for those born in 1938 compared to those born in 1942.

Håkan Svärdman, a welfare analyst at Folksam, said everything points to a continued fall in state pensions, which means those people born in the 1980s and 1980s will have a total pension worth only 60-65% of their final salaries. This is far from the average 80% for those born in the 1940s.

That said, the proportion of the total pension coming from occupational pensions is increasing for those people born in later years. Anyone born in 1938 receives just 17% of their total pension from an occupational pension pot but it increases to 19% for those born in 1942.

The number of people with access to occupational pensions has also increased from 90% to 92%. The proportion of private pension within that total pension sum is just above 7% for both peer-groups, even though the number of people with private pensions has increased from 41% to 48% in the two groups.

The survey also suggests people on low-income will actually have more in retirement income than when they were working. Low earners can expect to receive a pension equivalent to 110-115% of final salary depending on when you were born. A quarter of low-earners are also entitled to housing support, which will further improve their financial situation in retirement. However, even if low-income earners will be better off in retirement than when they were working, their actual income remains low.

Those in the middle income category can expect their pension to be worth 80-84% of their final salary and high-earners can expect to get receive between 73% and 76%, depending on when they were born.

In conclusion, Svärdman said concern about pensions is relevant and urged the Swedish parliament and government to take the matter seriously, arguing there is a need to evaluate the current system and find solutions which are more sustainable for all; not just for state finances but the people saving for their retirement as well.

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