Around 10,000 Danish state pensioners and early retirement recipients return to the labour market every year, new figures from Insurance and Pension Denmark (I&P Denmark) have revealed.

I&P Denmark said that the annual figure for those returning to work after starting to receive payments from their pension scheme has been "stable" over the past decade, ranging from a low of around 7,000 (2020) to a high of just over 11,000 (2021).

"It is hugely positive that so many people choose to contribute to the labour market again, even after having started their retirement," I&P Denmark pension director, Jan V. Hansen, said.

"But it can be a disadvantage for these people that it is not possible to stop payments from the installment pension again, if it has once started. This is unfortunate – both for them and for society."

Hansen also argued that there is potential for more pensioners to return to work in the labour market in future, suggesting that "complicated" rules are currently preventing some who would be keen to return to work, over fear of larger tax bills.

Indeed, Hansen explained that once payments from an installment pension have begun, they cannot be paused, meaning that people with both a salary and a pension payment risk being taxed higher.

They also do not have the opportunity to save their installment pension until they finally stop working, and may need it more.

According to Hansen, this can deter more people from returning to the labour market, even if they want to.

"An option to pause the installment pension payment could encourage more people to return to work," he suggested.

"The rule complicates the pension system and seems redundant, so let's abolish it so that in future you can pause your installment pension in line with annuities."

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