Sweden’s investment landscape is shifting as the government prepares to adjust tax policies surrounding investment Savings Accounts (ISK) in the new year. While the tax rate on ISK savings will see a slight increase, a notable expansion of the tax-free savings amount – doubling from 150,000 to 300,000 Swedish kronor – is poised to benefit over four million Swedish savers [1]. Analysts predict the net effect will be a tax reduction for many, incentivizing increased savings in a market where ISK accounts are already widely utilized.
SWEDISH TAX BURDEN
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The tax-free amount for Investment Savings Accounts (ISK) will be increased next year. Archive image.
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Henrik Montgomery/TT
Taxes on Investment Savings Accounts (ISK) will increase next year, but the tax-free savings amount will simultaneously be expanded to 300,000 Swedish kronor.
This change is expected to make saving more profitable for most of Sweden’s over four million ISK savers.
– The tax rate will increase, but overall, taxes on savings will decrease for many,” says Stefan Westerberg, private economist at Länsförsäkringar.
The tax-free savings amount for ISK and capital insurance policies will be raised from 150,000 to 300,000 Swedish kronor at the turn of the year.
The tax rate for next year is based on the state loan interest rate set on November 27. Based on the current state loan interest rate of 2.55 percent, the effective ISK tax will be 1.065 percent in 2026, up from 0.888 percent this year, according to the formula used.
“Increases Incentives”
For an individual with 500,000 Swedish kronor in ISK savings, this will result in a tax payment of 2,130 Swedish kronor, which is 978 Swedish kronor lower than this year’s level, according to Länsförsäkringar’s calculations.
The explanation for this is the increased tax-free amount.
– This increases the incentives to save and increases the attractiveness of the ISK and capital insurance policy as a savings form,” says Stefan Westerberg.
An individual with 350,000 Swedish kronor in savings will receive 1,244 Swedish kronor less in tax, while the tax for an individual with one million Swedish kronor in their ISK will only decrease by 93 Swedish kronor. After that, the tax will start to increase compared to this year’s level.
According to Skatteverket (the Swedish Tax Agency), just over 4 million taxpayers had ISK accounts in 2024. The number of people with a total value of more than 300,000 Swedish kronor was just over 1.17 million. The average value of Swedish ISK savings was 617,973 Swedish kronor.
“Advantageous Savings Form”
Is there a situation, given the new rules, where one should review their ISK savings?
– No, generally speaking, ISK is an advantageous savings form due to its simplicity. Now, with the new tax rules, it becomes very tax-efficient,” says Westerberg.
The government’s goal is to encourage more people to save, and the tax reduction on ISK, which will be fully implemented next year, is estimated to cost 7 billion Swedish kronor per year from 2026 onwards, according to last year’s autumn budget.
Joakim Magnå/TT
Fact
Profits from ISK are not taxed. Instead, an annual standard tax is paid on the total value of the account.
The tax level for the next year is based on the state loan interest rate on November 30 of the current year.
The tax is calculated from a formula where one percentage point is added to the state loan interest rate (1.96+1=2.96 for 2025 and preliminarily 2.55+1=3.55 for 2026). The tax then amounts to 30 percent of that.
For 2025, the tax applies to amounts over 150,000 Swedish kronor. In 2026, the tax-free level will be raised to 300,000 Swedish kronor.
In 2024, 4,002,681 taxpayers had ISK accounts, according to Skatteverket. 1,175,772 of them had over 300,000 Swedish kronor in value in their accounts.
