Nearly half (42 per cent) of Swedish savers are unsure what money-back or refund protection is, while nearly three-quarters (74 per cent) are unsure if they even have refund protection, research from pension company AMF has revealed.

Under the Swedish system, refund protection ensures that beneficiaries, such as a spouse, common-law partner, registered partner, or children, receive a share of the money that has been earned for the occupational pension if a saver dies.

According to the survey, just under a third (30 per cent) of single savers have repayment protection.

However, AMF's research found that misunderstandings continue to surround this protection, warning that a large proportion of savers do not have the protection they think they have, which could have serious financial consequences.

Indeed, the survey found that, of those with refund protection, just under four in ten (38 per cent) know they have it, while nearly a quarter (23 per cent) of those without refund protection thought they had it.

AMF spokesperson, Johan Holmer, said that it can be particularly beneficial for those with families, warning that "not having the solution you think you have or that you actually need can lead to a nasty surprise for your family, or to receiving a lower pension than you could have received".

"For those who are in a family situation where repayment protection can be good, for example in the middle of life with small children, it risks being fatal for the family if you do not have it and something were to happen," Holmer explained.

"For those who do not need repayment protection, for example if you have adult children and a partner who is doing well on their own income, it may be a good idea to remove the protection and thus receive a higher retirement pension."

However, the AMF found that nearly half (42 percent) of respondents with families do not have repayment protection, and perhaps more concerningly, of these, one in four (26 per cent) believed that they do have protection.

Given this, Holmer emphasised that there are good reasons for savers to check whether they have repayment protection, and whether they really need it or not.

"You should look at your family situation, other insurance and survivor's protection as well as other financial conditions," he stated.

"Not having repayment protection means that you can take part in inheritance profits and thus receive a higher pension."

This also builds on recent research from KPA, which found that women were more likely to forego repayment protection than men, as many women looked to maximise their current pension payment.

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