Immigrants in Denmark are less likely to save for retirement and have lower average levels of pension contributions than non-immigrant workers, according to Insurance & Pension (I&P) Denmark.

The association noted that employment in Denmark was at historically high levels, with the increased immigration of foreign labour identified as a key driver.

While employment had increased significantly, I&P Denmark warned that the picture was less positive on the pensions front, as immigrants continued to have lower wages, were less likely to save for retirement, and had lower pension contributions than non-immigrants.

Nearly three quarters (72 per cent) of Danish immigrants were in work in 2024, compared to 83 per cent of non-immigrants.

Among working immigrants, the average pension contribution level was 9 per cent of salary, compared to 12.7 per cent among non-immigrants.

Over a quarter (27 per cent) of immigrants had no pension assets, compared to 7 per cent of non-immigrants, while 43 per cent had such low pension savings they were expected to be able to receive a full pension check if they meet the residence requirement.

Of the quarter of immigrants, excluding Nordic citizens, that have permanent residency, 16 per cent had no pension assets and 29 per cent had such low pension savings that they were expected to be able to receive a full pension check if they meet the residency requirement.

"It is fantastically positive that more immigrants have come to work,” commented I&P Denmark pension manager, Lotte Katrine Ravn.

“This has great value for the individual – and to a large extent also for the Danish economy. But at the same time, we see a clear picture that the increasing employment does not lead to sufficient pension savings.

“Compared to the rest of the population, there are more immigrants who either do not pay into pensions or pay a lower proportion of their salary than non-immigrants.”

The association said that, if employed immigrants were to have pension arrangements similar to those of non-immigrants, more people need to contribute to their pensions and the contribution rate must increase.

It estimated that the proportion of employed immigrants contributing to pensions must increase from 75 per cent to 91 per cent, while the average contribute rate needed to rise by 2.1 percentage points, to be on par with non-immigrants.

“It is clearly positive for public finances when a citizen is employed regardless of background,” said Katrine Ravn.

“But we must focus on ensuring that immigrants in the labour market also save enough for retirement, unless, of course, they only work in Denmark for a limited number of years. Stable pension savings are important for all citizens – and for the Danish treasury.”

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