Insurance and Pension Denmark (I&P Denmark) has warned that a proposed pension reform from the Danish Social Democrats could weaken incentives for retirement saving by removing a key tax deduction for high earners.

The proposal would remove the pension tax deduction for those paying the top rate of income tax, a change that could affect around 450,000 pension savers and, according to I&P Denmark, significantly reduce the incentive to save for retirement.

I&P Denmark CEO, Kent Damsgaard, warned that if politicians undermine the desire to save, it could undermine the foundation of the Danish pension system.

However, he welcomed the Social Democrats’ proposal to set up a working group to analyse the removal of the pension tax deduction. Indeed, he said I&P Denmark would be keen to join such a working group to find a better solution.

Damsgaard also praised the Social Democrats’ plan to allocate DKK 15bn to secure the Danish coastline.

“Preparedness goes hand in hand with both defence and climate protection in Denmark, so that we can collectively safeguard the security of civil society…. However, we also need a preparedness plan that is ready to be implemented if the dykes break or if critical infrastructure is attacked or disabled. There is a significant need in this area as well, and we are pleased that the plan addresses this,” he said.

However, he stressed that a responsible economic policy must be maintained whilst addressing these priorities.

“At I&P Denmark, we are ready to contribute with knowledge and solutions that can support the strengthening of both climate adaptation and social security in Denmark in general – while at the same time continuing to safeguard the overall welfare and security of Danes as a society,” he said.

European Pensions has contacted the Social Democrats for a response to its proposal.

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