More than half of all pension kroner come from the public sector

Private savings are more popular now than they were 20 years ago, but pension benefits from the public sector and ATP are still the major source of income for pensioners in Denmark and that will continue to be the case for many more years.

In addition to the state pension, all Danes are entitled to a supplementary pension - ATP Livslang Pension (Lifelong Pension). This is a right regardless of whether you have made contributions to a labour market pension or a private savings account on the side. 

More and more people have done just that, but 40 per cent of Danish pensioners have not. For them, the pension benefits from the public sector and ATP are not just their basic source of income, it is the only pension benefit they have. 

Far into the future, there will still be a great deal of people depending on pension funds other than those they have been able to contribute to themselves.

Michael Jørgensen Head Analyst at ATP

Therefore, there will still be a need for the pension funds from the public sector and ATP to ensure that the population has the basic financial security that is the essence of the Danish welfare state - also when it comes to long-term trends.  

“It is good both for the individual and society that many people are seeing their pension savings grow. This might make some people believe that public pensions and ATP Livslang Pension (Lifelong Pension) will not exist or be particularly important for pensioners in the future. That, however, is completely wrong,” says ATP’s Head Analyst, Michael Jørgensen. 


Half of all pension payments in 2080 

ATP’s calculations using data from Statistics Denmark and the DREAM group reveal that there needs to be much higher levels of savings than those we see today before the private pensions begin to match the public pensions, even if the private savings are growing each year. 

If you assume that current trends will continue, everything indicates that the pension funds from the public sector and ATP will still amount to around half of the total income of pensioners in 2080.

“The interplay between private pensions, public pensions and ATP Lifelong Pension is exactly what helps to ensure that practically every Dane will be paid a reasonable pension in their old age. Many will even have decent incomes from their private pension savings, even if they are to a certain extent offset by the public pensions,” says Michael Jørgensen.