Danish pension companies’ investment returns were almost equal to the total amount contributed by pension savers for the period 2002 to 2021, according to Forsikring & Pension (F&P).

Its analysis showed that Danes paid DKK 2,513bn into pensions between 2002 and 2021, while the returns generated during the same period amounted to DKK 2,383bn before tax.

On average, Danish pension companies generated a return of 6.7 per cent per year during the period.

Only two of the years assessed produced negative returns.

While the majority of years provided a positive return, it looks likely that 2022 will produce a “very large” negative return.

“Many are experiencing right now that the war in Ukraine and the economic crisis atmosphere lead to a negative return this year,” commented F&P deputy director, Tom Vile Jensen.

“But fortunately, pensions are a long-term investment, and over the past 20 years very large returns have been created for pension savers. If you put DKK 100 into your pension in 2002, you will have added an extra DKK 95 before tax until 2021.

“The great importance of the return emphasises the importance of getting started early on saving for a pension for young people in the labour market. It can be expensive if a pension backlog has to be caught up later in working life, as you will miss out on returns.”

After tax on pensions, known as PAL tax, the total return on pension companies’ investments was DKK 2,171bn

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