Insurance and Pension Denmark (I&P Denmark) has raised concerns that younger Danes are opting out of traditional occupational pensions to invest in other products.

The comments, made by I&P Denmark CEO, Kent Damsgaard, come as evidence shows that a growing number of young people are interested in investing and saving, a shift seen during the coronavirus lockdown. However, I&P Denmark said they are finding advice in an unregulated universe, which can have consequences for their financial security.

“I am concerned that young people will completely opt out of the classic labour market pensions in order to invest and save up for old age, and in that way, miss out on the insurance policies that are typically associated with occupational pension products.

“It can have major consequences for their financial security and the common safety net that has been built up over centuries. As an industry, we therefore have a very special responsibility to now look at how we can better reach young people,” Damsgaard said.

A survey undertaken by Common Consultancy for the association found that the number of digital investment forums has increased from 100 to just over 200 in one year, and the total number of users exceeds 1.4 million.

The study also shows that a number of new digital communities have emerged where like-minded people meet and exchange experiences. “There is no doubt that it is the technology that has made it much easier than before for the individual to invest,” Damsgaard said.

“From the point of view of our industry, it is basically a really positive development that even more Danes - also early in life - take responsibility for their finances and have an interest in the entire financial area. Because it is probably something that has enormous significance for the individual - and for our society.

“But the conversation has also to some extent moved from the meeting room with professional investment advisers to digital communities with so-called fin-fluencers on platforms like Facebook, Instagram, Youtube and TikTok. And that development may give cause for concern.

“Although it is initially incredibly positive that young people's interest in investing, saving and finances has increased, the study shows that many people obtain information in a totally unregulated universe, where you can get advice that can be directly misleading and dangerous,” Damsgaard said.
 

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