Election Promise: Lower Taxes on Pensions

The Moderate Party enters the election with a new tax proposal aiming to lower taxes for pensioners who have earned their pensions through work. The proposal, which the party calls a “work-earned deduction,” was presented by Finance Minister Elisabeth Svantesson and Justice Minister Gunnar Strömmer, and is highlighted as one of the party’s most important election promises ahead of the 2026 election.

The idea is that pensions earned through employment should be taxed less than income not based on a working career. According to the Moderates, it should pay off both to work and to have worked. The party therefore wants to introduce a special tax deduction for pensioners, while also proposing additional tax cuts for people who continue to work after retirement age.

The proposal is part of a larger tax package which also includes an enhanced earned income tax deduction for people in employment. The Moderates state that this could provide up to 1,000 kronor more per month for those who are working. For seniors who choose to remain in the labor market, the party also wants to further strengthen the earned income tax deduction.

According to Elisabeth Svantesson, the reforms will be implemented in the next electoral term if the party gains the voters’ support. The Moderates argue that the proposals will both strengthen household finances and create incentives for more hours worked, which in turn is expected to promote higher growth and increased tax revenues.

According to the party, financing is to come, among other things, from reduced aid, lower welfare expenditure, and decreased bureaucracy.

Seeking Larger Reforms

However, the proposal has faced some criticism from pensioner groups. Anna Eriksson, pension expert at the SPF Seniors, welcomes the attention to the difference between having worked and not worked, but believes the Moderates’ model does not go far enough to increase the distinction between those with a long working life and those who have worked little or not at all.

The debate on pensioners’ taxes has surfaced repeatedly in recent years. The government has already implemented several tax cuts for the elderly, but previous reforms have also faced criticism because certain pensioners with low incomes have not benefited as much as other groups.

Pensioners’ organizations have therefore called for broader changes to the pension system and a review of basic protection for seniors with small financial margins.