The burden of type 2 diabetes (T2D) differs between socioeconomic groups. The present study combines ongoing and plausible trends in T2D incidence and survival by income to forecast future trends in cases of T2D and life expectancy with and without T2D up to year 2040. Using Finnish total population data for those aged 30 years on T2D medication and mortality in 1995–2018, we developed and validated a multi-state life table model using age-, gender-, income- and calendar year-specific transition probabilities. We present scenarios based on constant and declining T2D incidence and on the effect of increasing and decreasing obesity on T2D incidence and mortality states up to 2040. With constant T2D incidence at 2019-level, the number of people living with T2D would increase by about 26% between 2020 and 2040. The lowest income group could expect more rapid increases in the number with T2D compared to the highest income group (30% vs. 23% respectively). If the incidence of T2D continues the recent declining trend, we predict about 14% fewer cases. However, if obesity increases two-fold, we predict 15% additional T2D cases. Unless, we reduce the obesity-related excess risk, the number of years lived without T2D could decrease up to 6 years for men in the lowest income group. Under all plausible scenarios, the burden of T2D is set to increase and it will be unequally distributed among socioeconomic groups. An increasing proportion of life expectancy will be spent with T2D.