The Danish parliament has published a bill to make it more financially attractive for Danes who have passed the state pension age to work in the future, although awareness of the change remains low.

The bill, which was presented to the Danish parliament on 8 October, is intended to increase the tax-free senior premium, which Danes receive if they work in the first and second year after retirement age and are employed for at least 1,560 hours per year. 

Under the changes, the first-year premium would be increased by approximately DKK 5,300 to DKK 53,901 in 2026 and a further DKK 9,200 to DKK 63,080 in 2029.

The second-year premium would be increased by approximately DKK 3,200 to DKK 32,074 in 2026 and by approximately DKK 5,400 to DKK 37,420 in 2029.

Denmark has already seen a growing number of people postponing retirement to continue working, with figures from the Danish Labour Market and Recruitment Agency (STAR) revealing that the number of Danes over the age of retirement who are in employment has increased by 28 per cent over the last three years.

This trend is expected to continue, with Sampension chief advisory,  Helle Dalsgaard, pointing out that, with the proposed rise in the tax-free senior premium, the benefits of postponing retirement are now increasing further.

"All other things being equal, this can be expected to contribute to the continued growth in the group of pension-ready Danes who are employed going forward," Dalsgaard said.

However, Sampension found that awareness of these changes still needs to improve, especially among Danes approaching retirement age, as its epinion survey found that awareness of the increase in the tax-free senior premium is limited. 

According to the survey, 70 per cent of Danes said that they have not heard of this change, while 59 per cent of those aged 56-65 were unaware of the change.

"For individuals, there is good reason to be aware that with the increase in the senior premium, it may now be even more worthwhile to wait to retire. Because we know that the financial benefits of later retirement appeal to many Danes and can have an impact on their retirement plans," Dalsgaard said.

"In addition to the increase in the senior premium, there will also be other new initiatives from the new year that will make it more financially advantageous for Danes to stay in the labour market longer.

"Among other things, as a result of the new tax reform in the period 2026-2030, an additional employment deduction will be introduced for employed seniors who have two years or less until retirement age. This is of course also worth taking note of."

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