More than half (54 per cent) of Danish pension savers are concerned that the war in Ukraine and resulting instability in the financial markets will have a negative effect on their pension savings, according to research by Epinion for Sampension.

These people’s responses ranged from ‘somewhat concerned’ to ‘very concerned’, while 28 per cent said they were concerned to a ‘lesser’ degree and 11 per cent were not concerned at all.

“After a 2021 with a strong tailwind, the financial markets this year have been characterised by violent unrest and large fluctuations as a result of not least rising inflation and interest rates as well as the war in Ukraine,” commented Sampension marketing and customer advisory manager, Anne-Louise Lindkvist.

“It is never fun when the markets fall significantly in a short time, as we have seen in the first months of the year. And therefore it is also only natural that many Danes worry about what this turbulence means for their pension savings.”

However, despite the majority of Danes expressing concerns, just 14 per cent who said they were concerned were considering reducing their investment risk.

Of this 14 per cent, 53 per cent had already reduced their investment risk.

The survey found that the oldest age group (57-64 year olds) was the most concerned, but were also the least likely to have a reduced risk appetite as a result.

“It is completely understandable if in this time of great financial turmoil you have felt tempted to change your investment profile so that the savings are invested with less risk,” Lindkvist continued.

“But here it is important to keep in mind that pension savings are typically long-term investments, and that long-term savings will not be affected by short-term turmoil. Therefore, one should not panic and change the investment risk when the markets fall, because they can quickly recover.

“But if you are really upset about the current turmoil in the financial markets - which may be especially true for pensioners and Danes with a short time to retire, where the investment horizon is not so long - you can consider switching to an investment profile with lower risk.

“Here you just have to make it clear that the change will typically be associated with a loss in the long run, as you will probably miss out on the gain when the markets return.”

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