A number of factors have contributed to the general increase over recent years in the pension savings of our customers and of those living in Denmark in general. One key factor is that more and more people are paying into an employer-administered pension scheme alongside a general increase in the number of people in employment. This means that more people are covered by a pension scheme and more people start saving early.

On top of this, an increasing number of people are paying more into their pension schemes, and pension savings have in recent years been boosted by healthy returns in the financial markets. Also, factors such as rising house prices, which result in higher home equity, and an increase in deposits with banks have also resulted in an increase in the other savings people have.



Save up to maintain your standard of living for all of your life

At Danica Pension, we recommend that you should save up enough to maintain your standard of living when you reach the end of your working life and move into retirement – and for the rest of your life. This typically requires a total lifetime coverage of 80% of your wage income prior to retirement. Your income in retirement consists of the state retirement pension (ATP), your pension savings and the option to draw on any other savings you have at your disposal, including any home equity.

We can see that our customers have in general secured better-than-ever pension coverage prior to their retirement. And this means that they are more likely to be able to maintain their standard of living throughout their retirement years.

In 2023, more than one in four of our customers saved up more than our recommendation advises. This is the highest proportion during the 2016 to 2023 period.
And as shown in the table below, the proportion of people following Danica Pension’s recommendation has over same time period increased by 15% – from 37% to 42%. 
In contrast, the share of people whose standard of living is likely to decrease in retirement has decreased. In 2016, a total of 39% of all customers had an expected retirement income that was lower than our recommendation, and just over one in five could expect a significantly reduced standard of living in retirement. By 2023, the proportion of people facing the prospect of a reduced standard of living in retirement had decreased to 30%, or just three people out of ten. This equates to a 23% reduction.

Another important reason for the improved coverage is the level of returns on pension investments. There is a correlation between positive returns and a decrease in those who do not have adequate expected savings to maintain their standard of living in retirement. The improvement from 2020 to 2021 may have also been due to the fact that 2021 was a good year in the financial markets when many pension schemes achieved significant returns.

People in Denmark are retiring at an older age and have begun to prepare for later retirement

 Several initiatives have been implemented that contribute in various ways to the fact that people in Denmark are retiring increasingly later in their lives. And our data indicates that those generations of the population that are currently active in the labour market have also begun to prepare for retirement even later in their lives than those retiring today.
Extending your working life by one year has several benefits. You will be able to save up for a longer period of time and obtain higher returns, and you will not need to spread out your savings to cover as many retirement years. In combination, these benefits will boost your financial situation during your retirement.

Significant financial benefits from postponing your retirement

By postponing your retirement, you gain significant financial advantages. If you are entitled to voluntary early retirement benefits but postpone your retirement, you will be entitled to increased benefits when you do retire. In addition, you may be entitled to additional special benefits offered to those who continue to work beyond the state retirement age. And as mentioned above, you will be able to save up for a longer period of time and obtain higher returns, and you will not need to spread out your savings to cover as many retirement years. This means that you can get more out of your pension savings.

For all of these reasons, we recommend that you take the Danica Pension Check to give you peace of mind that you are saving up enough to your whole life.