Around one in six (17 per cent) Danes aged 25-63 can expect to see their income halved when they retire, but many can avoid this by saving more, according to analysis by Insurance and Pension Denmark (I&P Denmark).

Although Denmark is often highlighted internationally, as nine out of 10 Danes in the workforce are covered by a pension scheme, the association warned that there is still a “relatively large” group of employees who do not save enough for retirement.

I&P Denmark pension manager, Lotte Katrine Rvan, believes that society and individual pension savers need to pay more attention to this.

"Fortunately, many people can still make up for their pension savings because they still have many years left in the labour market. But unfortunately, we also see a group close to retirement age who are at high risk of a sharp drop in income as pensioners,” she said.

The association said the 17 per cent on track for a 50 per cent cut in their income in retirement consists mainly of highly educated people and people in industries with temporary employment, such as communications, consulting and the liberal professions, such as doctors, accountants, engineers and architects, etc.

I&P Denmark explained that these are often people who have relatively high incomes but limited pension contributions compared to many others in the labour market. As a result, their coverage rates will be low when they retire.

Although the proportion of people with insufficient pension savings gradually decreases with age, there are still more than 10 per cent who risk a significant drop in income, even though they only have 10–15 years until they reach state pension age.

"Young people, on the other hand, have plenty of time to make up for their pension contributions, and even a slightly larger contribution can have a significant impact on their pension assets, because the contributions will benefit from the compound interest effect for many years," Katrine Ravn noted.

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