The Swedish government is acting to make it easier for individuals to switch their pension from one provider to another, proposing legislation to allow savers to transfer with no tax consequences.

It has also moved to clarify rules around the fees pension and insurance companies may charge.

Per Bolund, minister for financial markets, said: “Swedish pension savers now have the opportunity to move their savings together, get a better overview of their future pension and lower their costs.

“As things stand today, many are locked in savings with high fees, which also risks reducing their pension. But we are now seeing this change,” he said.

The proposal, which the finance ministry is now putting forward to the Law Council, will set out clearer rules for companies on the fees they can charge for repurchasing and transferring individual personal insurance policies and pension savings.

It will also increase the opportunities for people to gather together in one place savings they have across various pension insurance policies, with the entire value of these able in future to be transferred to another provider with no tax consequences.

This freedom will apply during the paying-in phase as well as the pay-out phase, as long as no payments have yet been made from the pension into which the transfers are being made, according to the ministry.

The proposals on fees affect people with individual occupational pensions or private insurance savings, while the proposal for tax-neutral transfers to consolidate pensions also affect those with collective contracted occupational pensions.

The new legislation is scheduled to come into effect on 1 January 2020.