Newly retired Swedes receive an average of 79 per cent of their final salary in pension, known as the replacement rate, according to the Swedish Pensions Agency.

A report by the agency found, however, that the spread is very large; high-income earners receive 64 per cent and low-income earners 127 per cent of what they received as a final salary.

"The pension level in relation to the final salary is an average of 79 per cent for a person who was born in 1957 and receives a national pension and an occupational pension," Swedish Pensions Agency analyst, Kristin Kirs, said.

The fact that low-income earners see an increase in their income after retirement is due, among other things, to the guarantee pension, which increases the pension significantly for this income group. The national pension's replacement rate for high-income earners is 35 per cent, but including occupational pensions, the replacement rate is 64 per cent. Those on higher incomes are insured through occupational pension agreements that cover about nine out of ten employees.

Furthermore, the replacement rate for the state pension has fallen by 6 percentage points since 2008, excluding the effects of inflation. This is due to an increase in life expectancy and an unchanged retirement age.

"The declining replacement rate can largely be explained by an increase in average life expectancy, which is obviously a good thing, but it has a negative effect on pensions as the pension capital will then be distributed over more years as a pensioner. The upcoming retirement age increase is expected to counteract the falling replacement rate," Kirs said.

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