Denmark citizens will be able to work longer and retire later. A bill has been introduced in Denmark’s parliament that will raise the retirement age for Danish residents to 70, the highest retirement age in Europe.
The Danish Parliament (Folketing) has adopted a bill to increase the state pension age to 70 from 2040. This means everyone born after 31 December 1970 can retire when they turn 70. The state pension age is currently 67, but it will increase to 68 in 2030 and 69 in 2035.
According to the Pensions Act, the Danish Parliament must decide every five years whether to increase the retirement age if the life expectancy of 60-year-olds increases.
The state pension age was most recently increased in 2020 by one year to 69 years, effective from 2035. Previously, the retirement age was increased to 68 years in 2015, effective from 2030.
According to the Ministry of Employment, the current increase in the retirement age from 69 to 70 will strengthen public finances by approximately DKK 15bn by 2040.
A higher retirement age and, therefore, the state pension age will also impact pension savings.
For example, if one has an annual salary of DKK 400,000, pension savings of DKK 2m, and a pension contribution of 15 per cent, taking their state pension at age 70 instead of 69 would increase their pension savings by approximately DKK 128,000. Additionally, this would result in an increase of about DKK 1,200 per month before taxes in lifetime pension savings payments.
The longer one works, the more money comes in from a regular salary, and more contributions to the pension fund is possible. Further, the investments have more time to compound and generate a better return.
According to the official Statistics Denmark website, Denmark has a population of almost 6 million people, with around 713,000 between the ages of 60 and 69, and around 580,000 aged between 70 and 79.
More Danes are staying in their jobs for longer lengths of time. In Denmark, there are currently about 80,000 people beyond the state pension age of 67 who are employed. The reasons for people to continue working is attributed to favorable economic conditions, more accommodating employers, better financial incentives, and a stronger desire to stay employed.
Danish citizenship
You must fulfill certain conditions to acquire Danish citizenship. One of the conditions for acquiring Danish citizenship by naturalisation is that you have had a permanent residence permit for a minimum of 2 years, and that you are a resident in Denmark. Also, in most cases, a condition for acquiring Danish citizenship is that you have continuously been a resident in Denmark for 9 years.
Retirement Age in Other Countries
The first nation in Europe to raise the national retirement age over 60 is Denmark. It will now rank among the highest in the world, comparable to Libya.
In France, the raising of the retirement age to 64 was opposed by over a million French citizens in March 2023.
The Chinese government enacted laws in September that would see the retirement age for men raised from 60 to 63, and from 50 and 55 for women, depending on their occupation, to 55 and 58, respectively.
In the UK, the state pension age is expected to increase to 67 between 2026 and 2028, though it may be changed to 68 after a review.
Although the US and the UK have identical retirement ages, some Social Security benefits in America start to be paid out at age 62.