Two fifths (40 per cent) of those aged 56-65 have not received advice about or made a plan for their retirement finances, research from Denmark's Sampension has revealed, raising concerns that many could be at risk of missing out.

The group suggested that this is particularly concerning given the number of Danes retiring is steadily increasing in Denmark, predicting that this trend will continue in the future.

According to the latest figures from the Danish Labour Market and Recruitment Agency (STAR), the number of pensioners has increased continuously for the past two and a half years and is now just under the record level seen in January 2019, when there were 1,157,134 pensioners in Denmark. 

Given this, Sampension stressed the need for savers to start thinking about their retirement finances now, with Sampension chief advisor, Helle Dalsgaard, arguing that "they have good reason to get their future finances under control as retirees".

"By planning their retirement finances well in advance, there can be significantly more to do well in retirement. But a large proportion of Danes who can see retirement on the horizon are apparently not aware of this," she stated.

"It is particularly important to have a plan for how to get the most out of your savings when you are about to start using them in retirement. 

"This applies, among other things, to the order in which payments should be made from the Danes' increasingly large and complex savings, many of whom, in addition to their pension savings, also have savings in disposable income and a home on the side.

"In addition, there can, for example, also be significant gains to be made if you ensure that your payments are not unnecessarily severely affected by offsets against public benefits."

Dalsgaard highlighted the payment of an installment pension as one example, noting that whilst most Danes will have this paid out in the first 10 years after retirement, for many, there may be more to be gained by stretching the payments over a longer period, as this means that the annual payments will be smaller, and that one will therefore be more entitled to the supplementary amount of the old-age pension.

Indeed, calculations from Sampension showed that savers could get up almost DKK 300,000 extra to use in retirement by extending their installment pension payments from 10 years to 20 years. 

Given this, Dalsgaard warned that those savers who are not properly organising their pension and retirement finances run the risk of missing out on several hundred thousand kroner in retirement. 

"It is therefore important that Danes who are due to receive their pension in the foreseeable future get their pension finances under control in time," she stated, suggesting that "it is a good idea to seek advice, as this is a complex area".

---