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The Icelandic pension system consists of three pillars:

Social insurance

The social insurance system is a public pension system, funded with taxes, to which all Icelanders belong.

Entitlement under the general insurance system is linked to residence in Iceland.

Pension funds

Everyone working in Iceland is obliged to contribute to a pension fund.

The pension funds are based on workers’ cumulative contributions.

Pension fund members can also apply for disability pensions, spouses’ pensions and children’s pensions.

Supplementary pension savings

Supplementary pension savings are voluntary savings of individuals which provide those individuals with benefits.

The entitlement is inherited according to the rules of the Inheritance

Other types of pensions and supplements in the social insurance system

  • Child's pension
  • Spouses' pension
  • Disability grant
  • Age-related disability supplement
  • Guaranteed income
  • Household supplement

Pensions from pension funds 

Are you entitled to payments from an Icelandic pension fund? 

Entitlement to payment from pension funds is based on the contributions paid when an individual worked in Iceland.

Information about your entitlement can be obtained from the pension fund to which you paid when you worked in Iceland.

Information on entitlement is also available on the website www.lifeyrismal.is/en

In general, pension funds begin paying a pension at the age of 67 years, but some funds begin at age 65.

Pension payments are generally transferred along with persons who move to other Nordic countries, but it is advisable to contact the pension funds providing the payments.

Supplementary pension savings

Supplementary pension savings are your private property and are in addition to mandatory pension savings.

If you choose to build up supplementary pension savings, you may contribute between 2% and 4% of your salary and your employer then pays a matching contribution.

You can access your supplementary pension savings if you have a serious accident or illness that reduces your ability to work.

Payment from supplementary pension savings can begin at the age of 60 or later and is paid in equal instalments until age 67 or longer.

Supplementary pension savings are inherited upon a pensioner’s death according to the rules of the Inheritance Act.