Denmark’s pensions industry has raised the threshold for fee-free transfers of small pension pots from DKK 20,000 to DKK 25,000, Insurance and Pension Denmark (I&P Denmark) has revealed, to help savers consolidate around 785,000 dormant accounts.

Previously, the threshold to transfer a small pension pot free of charge was DKK 20,000, but the pensions sector has increased the limit to DKK 25,000 to encourage more people to consider consolidating their pensions.

I&P Denmark head of pensions, Lotte Katrine Ravn, noted that having a number of small dormant pension pots can be expensive in terms of administration costs for savers.

“Some people consciously choose to have several pension savings because, for various reasons, it can be seen as advantageous — even though it comes with administrative costs.

"But many of the 785,000 dormant pensions may be due to a lack of awareness,” Katrine Ravn said.

She added that in most cases, it makes sense for an individual to consolidate their pension pots and that pension providers can help with the practicalities of consolidating pots.

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