The new target retirement ages for Swedish savers have now come into force, after the Swedish government (the Riksdag) confirmed that it had decided to raise the target retirement age to 67 years.

The changes were made to prevent pensions from becoming lower in line with increasing life expectancy, as life expectancies have increased, meaning that pensions need to be paid out for more years.

The Swedish target age is decided each year and is used six years later. In line with this, the Riksdag decided that the target age for the years 2020 – 2024 is 67 years, which in practice will be applied during the years 2026 – 2030.

The minimum age for drawing income and premium pensions is three years before the target age, although there are certain exceptions due to transitional rules.

This means that, under the changes, the earliest savers can withdraw income and premium pension is from the age of 64 if their target age is 67.

"When it comes to guarantee pension, income pension supplement and housing supplement, the earliest you can receive these is from the target age that applies to you," Swedish Pensions Agency pension expert, Monica Zettervall, explained.

However, the Swedish Pensions Agency warned that many savers are unaware of their target retirement age, with previous research from the group revealing that 8 per cent are familiar with the concept of target age.

"It is important to know the target age because it affects when you can withdraw your public pension," Swedish Pensions Agency pension expert, Monica Zettervall, said.

"The target age will affect all generations to come. When you receive your orange envelope and log in to pensionsmyndigheten.se, you will see which target age will probably apply to you."

However, younger generations will not know which age guidelines apply until an age has been decided closer to the time.

However, the Swedish Pensions Agency pointed out that forecasts are made in advance, with those born in 1964 and onwards having a projected target age, providing some guidance on which age guidelines will apply in the future.

The target age can be changed by a maximum of one year at a time, provided that it has not changed in the previous three years.

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