Half of young Danish pension savers age between 18 and 34 have not decided on the investment risk level of their pension savings, according to Sampension.

A survey of 1,000 Danes by Epinion on behalf of Sampension, found that this group is lagging behind other age groups. Thirty-two per cent of 35-55 year olds and 22 per cent of 56-65 year olds have not decided on a risk level.

Looking at the population as a whole, 34 per cent have not considered whether their pension is invested with high, medium or low risk. However, 55 per cent have taken some action, and 11 per cent said they did not know.

"Risk appetite is individual, and there is no right or wrong. Some want the most possible risk and thus higher expected returns in the long term, while others would rather have peace of mind and fewer fluctuations in returns along the way, even though this may involve a risk of lower returns and lost purchasing power,” Sampension head of market and customer advice, Anne-Louise Lindkvist, said.

“But no matter what, it is important that you take a stand and ensure that your pension is invested with the risk you prefer.”

She stressed, however, that young people have good reason to be aware of their investment risk as they should consider a higher investment risk.

“Although there is no guarantee, an investment profile with high risk can give a higher expected return over time. At the same time, you also have to be able to tolerate larger fluctuations in the returns along the way. Young people have many years until retirement and thus a long time to make up for any losses in individual years," Lindkvist explained.

In addition, the survey also shows that a larger proportion of women (41 per cent) than men (28 per cent) have not considered the investment risk.

"Women generally have less pension savings than men, and at the same time it must last for several years, as they typically retire earlier and live longer than men. Women themselves can contribute to strengthening their pension savings in the long term by focusing more on their pension; one of the ways to increase savings can be higher investment risk,” Lindkvist said.

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