Two to three million people in Sweden use private pension schemes that are currently tax deductible. But the government plans to drastically reduce the amount of tax one can draw off a private pension, from SEK 12,000 as it is today to just SEK 1,800 crowns. The tax deduction will completely disappear in 2016.
The proposal is included in the budget bill and if the budget goes through on December 3, the new rules will take effect just four weeks later. But the time is too short for all private pension savers to have time to cancel their savings and find another retirement savings scheme, say some banks, insurance companies and policy holders.
Radio Sweden spoke to Björn Dickson from Swedish Radio's Economics department who explains more.