The Danish government’s agreement on winter assistance will benefit pension savers as it will be partially funded by raising the limit people can pay into their annual retirement savings, according to Forsikring & Pension (F&P).

F&P noted that the limit for how much Danes can pay into their pension savings annually, known as the low ceiling, will be raised from 1 January 2023 to help pay for lower electricity taxes.

Furthermore, the time period Danes are able to save up to the ‘high ceiling’ is also increasing, from five to seven years before state pension age.

F&P said that this was an important step to helping Danes save more in their last years of work and a good improvement on the possibilities of saving for retirement.

The agreement was made between the government, the Liberals, SF, Radical Liberals, Enhedslisten, Conservatives, the Danish Democrats, the Alternative and the Moderates.

“The towering electricity bills create great insecurity among Danes about their finances, so it is positive that a broad majority lends a helping hand,” said F&P CEO, Kent Damsgaard.

“The agreement shows how the pension system can also help to solve a major social challenge in a difficult time.

“The improvements that the Danish parliament implements by extending the period with high contributions before retirement age will benefit a great many pension savers.”

He added that the rapid roll-out of retirement savings will require politicians and authorities to resolve outstanding problems with offsets in public benefits.

“In order for the Danes to make saving through retirement savings seriously attractive, it requires that the problems with offsets for a number of public services be removed as soon as possible, so that it always pays to save through retirement savings,” Damsgaard added.

“Deductible pension schemes are the very central element of the Danish pension system, and therefore the Pensions Commission has also proposed a higher tax deduction for those schemes. It will be obvious for the politicians to tackle that task in continuation of the agreement here.

“Not all companies will be ready on 1 January 2023, but the industry will, as always, do what we can. It is of course also a decision which is up to the individual companies and their members.”

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