The proportion of young people in Denmark paying into a pension scheme has increased by 13 per cent over the past decade, according to figures from Insurance and Pension Denmark (I&P Denmark).

Data published on 29 December shows that the share of 20–24-year-olds making pension contributions has risen from 41 per cent to 54 per cent over the past 10 years, equating to around 50,000 more young people beginning to save for retirement.

The figures also indicate that 24-year-olds who are members of a pension scheme have already accumulated an average of DKK 65,000 in savings, suggesting improved long-term prospects for the current generation of young savers.

I&P Denmark pension manager, Lotte Katrine Ravn, claimed the trend reflects both favourable labour market conditions and structural changes to pension coverage.

“One of the reasons why more young people are now saving for retirement is the high employment that Denmark has experienced in recent years," she said.

"The majority of employees pay into pensions, but mandatory labour market pensions have also covered more young apprentices and students.”

Ravn also stressed the importance of starting to save early, highlighting the long-term benefits of compound interest.

“Compared to today, young people ten years ago started saving for retirement later.

"But the sooner they start, the greater the long-term effect of compound interest, because the money is invested for several years," Ravn continued.

This will have a major impact on the current young generation’s total pension assets when they reach retirement age.

"This is a good and important development,” she added.

The increase in participation among younger savers comes amid steadily rising pension assets across the system.

Indeed, the pension industry estimates that it will need to invest an additional DKK 400bn by 2030 alone, I&P Denmark warned.

Meanwhile, Ravn noted that higher overall contributions are also being driven by demographic and policy factors, with older workers remaining economically active for longer.

“Older people are staying longer in the labour market, partly because the state pension age has been raised.

"In addition, we can see that Danes are generally paying more into their savings than before,” she concluded.

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