Insurance & Pension Denmark has urged the Danish government to seize what it describes as an “obvious opportunity” to enhance flexibility within the country’s pension system.

It argued that reforms are needed to better support longer working lives and smoother retirement transitions. The proposals include boosting pension tax incentives and allowing earlier access to savings.

The call follows Prime Minister Mette Frederiksen’s New Year’s address, in which she highlighted that while some Danes can leave the labour market early using their own savings, the majority continue working until they reach the state pension age.

I&P Denmark stated that the reality is that more people are both able and willing to remain in work for longer; however, policy adjustments could help ensure they do so on a financially secure and sustainable basis.

“We have what is perhaps the world’s best and strongest pension system, so we have a fantastic starting point for ensuring that Danes can enjoy a secure financial old age. But it makes perfect sense to increase flexibility for pension savers,” said I&P chief executive, Kent Damsgaard.

He added that increasing pension deductions would give savers additional support when building up their retirement provision, particularly at a time when more workers are taking responsibility for long-term financial planning.

According to the association, many Danes are seeking a more gradual move into retirement, potentially reducing their hours towards the end of their careers while remaining in the labour market for longer.

Allowing pension savers to access their benefits up to five years before the state pension age would, it said, enable more people to shape that transition in a way that meets individual needs.

“This is an area where the government can really make a difference for many people,” Damsgaard said.

He added that greater flexibility would help many savers as they approach retirement, particularly those looking to reduce their working hours while remaining in the labour market for longer.

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