Almost a third (31 per cent) of Danish pension savers expect to receive a positive return on their pensions this year, despite returns in 2022 generally being negative amid challenging market conditions, according to survey from Sampension.

The survey, conducted by Epinion, found that less than a quarter (23 per cent) expected a negative return, while 5 per cent expected a 0 per cent return and 41 per cent did not know.

A fifth (20 per cent) of those surveyed believed they would get a return of between 1 and 5 per cent, 9 per cent expected it to be between 6 and 10 per cent, and 2 per cent thought it would be more than 10 per cent.

On the other hand, 10 per cent of respondents expected a negative return of between 1 and 5 per cent, 8 per cent foresaw negative returns of 6 to 10 per cent, and 5 per cent expected negative returns worse than 10 per cent.

Older Danes appeared to have more positive expectations, with 36 per cent of 57 to 65 year olds expecting a positive return, compared to 31 per cent of 35-56 year olds and 27 per cent of 18-34 year olds.

"Danes have for a number of years benefited from good returns on pension savings, and in the last 20 years we have only experienced negative returns here at home twice - in 2008 and in 2018,” commented Sampension CEO, Hasse Jørgensen.

“Therefore, perhaps we have generally become accustomed to positive pension returns year after year, and against that background, it is also very natural that, according to the survey, many have positive expectations for this year's return.

"Having said that, there is reason to expect that this year we will experience much lower returns than we have been used to.

“Because although it is of course impossible at this stage to predict exactly what the return will land on this year, it is difficult to imagine that it will end up on positive ground when you take the year's preliminary return and the prospect of continued high inflation, taking interest rate increases and increased recession risk into account.”

The survey also found that 65 per cent of Danish pension savers have not checked the return on their pension savings this year, with just a third having checked it.

"When there seems to be a discrepancy between what many Danes expect to get in return this year and what there is realistically reason to expect, it may also be connected to the fact that few people have checked the return this year,” added Jørgensen.

“We can therefore only encourage more people to contribute a little to the pension, so that return expectations are more in line with reality.

"In particular, Danes who have a short time until retirement must pay attention here. Because this group, in contrast to the younger ones, does not have many years to make up for the expected loss of pension savings this year.

“Therefore, for these Danes in particular, it is generally important to regularly check the return, which has an impact on the size of the pension savings and thus also on the pension payments in the end.”

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