Pensions in Denmark Explained

In Denmark, pensions are an essential part of the social safety net, providing a decent standard of living for retirees.

The Danish pension system is based on a pay-as-you-go model, meaning that current workers fund the pensions of current retirees.

Denmark has a relatively high retirement age of 67, which is increasing to 70 by 2028.

This means that most people will need to work for at least 40 years to qualify for a full pension.

Check this out: Nike Current Ratio

In Denmark, the public pension is made up of two tiers. The first tier provides a universal income to people over the age of 67.

This pension is paid to anyone that meets its qualifications, regardless of a retiree's contributions. As of 2019, the maximum amount a person could receive was DKK 75,924 (US$11,504).

The pension is means-tested, so it can be adjusted for lower income individuals up to a maximum of DKK 159,000 (US$ 24,091).

For readers also looking at how working life or relocation decisions connect with Denmark’s administrative and business framework, BridgeWest Denmark offers practical context through guidance for opening a company in Denmark, which can be useful when understanding broader financial planning in the country.

Universal Social Pensions in Denmark are a unique aspect of the country's pension system. They provide a universal income to people over the age of 67, regardless of their contributions. This tier is funded by general tax revenue collected by the state.

The maximum amount a person can receive is DKK 75,924, but it can be adjusted for lower-income individuals up to a maximum of DKK 159,000. The pension is reduced by 30 percent of any income that exceeds DKK 329,600.

To receive this pension, recipients must have lived in Denmark for 40 years while they were between the ages of 15 and 65. However, if a resident has spent less than 40 years in Denmark, they can still receive the pension at a proportionately reduced rate.

Check this out: Universal Pension

If you live outside Denmark and receive payments from an annuity pension or pension scheme, the double taxation agreement between Denmark and your country of residence will decide where you have to pay tax.

The general rule is that you pay tax on these payments in your country of residence.

You may be tax exempt in Denmark under this agreement, but you still need to report the portion of your pension that is tax free to the Danish authorities.

To do this, log on to E-tax and enter 'skattefritaget' (tax-exempt pension) on your tax return, box 28.

However, Denmark may still have the right to tax your pension payments even if you live outside the country.

Curious to learn more? Check out: Parole Payments Online

You may be liable to pay supplementary tax on contributions if you leave Denmark and have had more than 20% of your pay paid into a company pension scheme providing a regular income or an annuity pension scheme during the 5 years (10 years for principal shareholders) immediately prior to moving abroad.

The 5-year rule applies to most employees, but principal shareholders have a longer window of 10 years to consider before moving abroad.

If you're unsure about your specific situation, it's always a good idea to consult with a tax professional or financial advisor to get personalized advice.

Discover more: Stakeholder Pension Scheme

Your state pension is paid directly into your NemKonto account, which is a normal bank account that you assign at your bank. All citizens in Denmark are required to have a NemKonto if they receive payments from public institutions.

Udbetaling Danmark uses your tax assessment notice from Skattestyrelsen, as well as information about your income and your spouse's/cohabitant's income, to calculate your pension. This means that your spouse's/cohabitant's income is also included in the calculation.

The basic amount of your state pension is the same for single people and cohabiting people, but the pension supplement depends on whether you are single or married/cohabiting. The basic amount is DKK 7,198 per month before taxes.

Worth a look: What Credit Cards Do the Wealthy Use

If you've not lived in Denmark your whole life, you might be receiving a lower pension, known as a fractional pension. This can affect the amount of pension you receive.

You can apply for a personal supplement to cover an additional need for assistance, and it's not taxed.

Your supplement percentage is 100 if your income beyond your state pension or disability pension doesn't exceed DKK 35,200 per year (2025) if you're single.

If you're married or cohabiting, your incomes beyond your state pensions or disability pensions don't exceed DKK 69,700 per year (2025) for the supplement percentage to be 100.

If you're single and your income is more than DKK 95,800 per year (2025) on top of your state pension or disability pension, your supplement percentage will be lower.

The same applies if you're married or cohabiting and have income more than DKK 192,000 per year (2025) on top of your state pension or disability pensions.

For another approach, see: Joint Credit Cards for Married Couples

You'll receive your alderspension as a lump sum when it becomes due. This is because it's taken out with a bank or a pension company.

Your total income is taken into account when calculating your alderspension, which is why your spouse's or cohabitant's income is included in the calculation.

If your total income was higher than the income on which your alderspension was based, you may need to pay some of it back.

Consider reading: Total Value of Household Assets

In Denmark, there are different types of pension payments that can provide you with a fixed monthly income.

A livrente, for example, guarantees you a monthly amount for as long as you are alive.

Your state pension is paid directly into your NemKonto account, which is a normal bank account that you assign at your bank.

NemKonto is a required bank account for all citizens in Denmark who receive payments from public institutions.

Udbetaling Danmark uses your tax assessment notice from Skattestyrelsen to calculate your pension payment.

You must also provide information about the income received by you and your spouse/cohabitant which is not taxed in Denmark.

A livrente gives you a fixed monthly income, similar to a ratepensionen, but with a guaranteed monthly amount for as long as you are alive.

For your interest: Fixed vs Variable Cost

If you live in Denmark and must pay back pension, you'll receive a letter with a payment form in your Digital Post by late June or early July.

You'll need to transfer money to Udbetaling Danmarks bank if you live outside of Denmark, using the following details:

Make sure to inform Udbetaling Danmark about any changes to your and your spouse's or cohabitant's income, especially if you have additional income that's not taxed in Denmark.

To claim your Danish State Pension, you'll need to act fast - you can do so if you're within 5 months of reaching state pension age. You can claim online or by post, but be aware that claiming by post will take more time.

To claim online, head to the website and follow the instructions for applying with MitID. If you're unable to claim online, you can request a paper version of the claim form by contacting Udbetaling Danmark, Pension.

Here are the key dates to keep in mind:

If you live in Denmark and must pay back pension, you'll receive a letter with a payment form in your Digital Post late in June or early July.

You can transfer money to Udbetaling Danmarks bank if you live outside of Denmark. To do this, use the following details: Danske Bank, Reg. nr. 0216, Konto nr. 4069046312, SWIFT-adresse: DABADKKK, IBAN nr.: DK7102164069046312, and remember to type in your CPR number.

Make sure to inform Udbetaling Danmark about any changes to your income, and also inform them about any changes to your spouse's or cohabitant's income.

If your additional income is taxed in Denmark, you don't need to inform Udbetaling Danmark, but you do need to change your preliminary income assessment.

Here are the bank details to repay pension:

In most cases, Udbetaling Danmark uses your preliminary income assessment to calculate your pension.

In Denmark, there are pension supplements available to help cover additional needs for assistance.

If you haven't lived in Denmark your whole life, you might be receiving a lower pension, known as a fractional pension. You can apply for a personal supplement to cover this extra need.

You won't be taxed on the personal supplement, which is a nice perk.

To qualify for the maximum supplement percentage of 100%, you need to meet certain income requirements. If you're single and your income beyond your state pension or disability pension doesn't exceed DKK 35,200 per year (2025), you're good to go.

If you're married or cohabiting, and together your incomes beyond your state pensions or disability pensions don't exceed DKK 69,700 per year (2025), you also qualify for the maximum supplement percentage.

However, if your income exceeds certain thresholds, your supplement percentage might be lower. If you're single and your income exceeds DKK 95,800 per year (2025) on top of your state pension or disability pension, your supplement percentage will be lower.

The same applies if you're married or cohabiting and have income exceeding DKK 192,000 per year (2025) on top of your state pensions or disability pensions.

Here are the income requirements for the maximum supplement percentage:

If your spouse or cohabitant has an income on top of their pension, it might impact your personal supplement percentage.

The elderly cheque is a supplementary pension benefit that you'll receive automatically if you meet the conditions and have previously disclosed your assets to Udbetaling Danmark.

You can receive up to DKK 25,700 per year in the supplementary pension benefit (elderly cheque), and the entire amount is taxed.

If your assets have changed, you must notify Udbetaling Danmark by no later than 31 July to be eligible for the benefit.

The size of your supplementary pension benefit (elderly cheque) depends on your personal supplement percentage, and if it's less than 100, you'll receive a correspondingly smaller amount.

You'll receive the supplementary pension benefit, also known as the elderly cheque, automatically if you meet the conditions and have previously disclosed your assets to Udbetaling Danmark.

If you haven't previously disclosed your assets, you'll need to do so before you can receive the elderly cheque.

You must notify Udbetaling Danmark by no later than 31 July if your assets have changed, which can happen as of 1 January.

If you have not previously provided information about your assets, it's essential to do so if you want to receive the elderly cheque.

The amount you can receive from the elderly cheque is quite straightforward. You can receive up to DKK 25,700 per year (2025) in the supplementary pension benefit (elderly cheque).

This amount is taxed, so keep that in mind when calculating your overall income. The exact amount you receive will depend on your personal supplement percentage.

If your supplement percentage is 100, you'll receive the full supplement, but if it's less than 100, your payment will be smaller. There's also a minimum limit for receiving a supplementary pension benefit (elderly cheque), and amounts below DKK 200 are not paid out.

It's worth noting that if you have a fractional pension due to not always living in Denmark, your elderly cheque will be reduced proportionally.

Recommended read: Bangladesh Loan Amount

Your civil status can impact your state pension. As a rule, you will receive a higher pension if you are single instead of cohabiting.

If you're receiving a state pension and your civil status changes, you must notify Udbetaling Danmark. This means telling them if you get married, become cohabiting, or vice versa.

Your spouse or cohabitant will automatically receive your state pension for up to three months after your death if they also receive a state pension. This is called survivor benefits.

If you pass away, your relatives don't need to do anything about your state pension. Udbetaling Danmark will be notified of the death by the Civil Registration Office unless you live abroad.

Your spouse or cohabitant will receive a letter from Udbetaling Danmark about survivor benefits within a week of the death being registered in the Civil Registration System (CPR).

If your spouse or cohabitant also receives a state pension, they will be paid a state pension as single after the three months have passed.

If this caught your attention, see: Unemployment Benefits in Denmark

In Denmark, occupational pensions cover nearly 90 percent of the workforce.

These schemes are mandated by collective bargaining agreements made between employers and employees, usually at the sectoral level. Company wide plans do exist, but they are not as common as sector wide pensions.

Typically, employee contributions range from 9 to 17 percent of their salary, with the average amount being 11 percent. High wage earners contribute a higher percentage of their income to their pension than low wage earners.

It is typical for the employer to contribute two thirds and the employee one third in the occupational pension system.

Most plans depend on defined-contribution schemes, often including death and disability benefits.

In 1998, the labor force was recorded to have contributed about 4% of their gross salary to pensions, and in 2002, 77% of the labor force contributed over 7%.

A unique perspective: Accounting and Bookkeeping Salary

Pension policy in Denmark during the 1980s and 1990s was defined by pension funds and insurance companies guaranteeing a minimum interest rate for new pension policies.

The guaranteed rates were low and were given to policyholders free of charge, which seems like a great deal at the time. However, these rates were not sustainable in the long run.

Curious to learn more? Check out: Class B Shares Private Company

Pension institutions invested in callable mortgage bonds that allowed borrowers to refinance their mortgages when interest rates fell. This created an asymmetric interest risk rate that had a significant impact on the Danish financial system.

The collapse of equity markets and the subsequent decline in global interest rates left pension contracts and institutions with significant liabilities, drained capital reserves, and mismatched assets.

Decommodification is influenced heavily by pensions because of the link created between retirement income and labor market attachment. This means that workers are less likely to switch jobs or industries if they have a secure pension.

The Nordic pension system combines generous social protections and labor market flexibility, but it also widens inequality between workers and the unemployed.

Here's an interesting read: Federal Reserve System

Your state pension is paid directly into your NemKonto account, which is a normal bank account that you assign at your bank. All citizens in Denmark are required to have a NemKonto if they receive payments from public institutions.

You can receive a supplementary pension benefit if your personal supplement percentage and liquid assets as of 1 January meet the criteria. This benefit is calculated based on your personal supplement percentage and liquid assets.

The basic amount of state pension is the same for single people and cohabiting people, at DKK 7,198 per month before taxes. Your economic situation affects what you will receive in state pension, but income from wages, interests, individual pensions, or labor market pensions does not affect the basic amount.

Here's a breakdown of the monthly amount for state pension in DKK, before taxes (2025):

If you're single, your pension supplement will be reduced if your annual income exceeds DKK 419,300. If you're married/cohabiting with a non-pensioner, your pension supplement will be reduced if your combined income exceeds DKK 351,900.

Your state pension is paid out in a monthly amount, before taxes. This amount is divided into a basic amount and a pension supplement.

The basic amount is the same for single people and cohabiting people, at DKK 7,198 per month. This amount doesn't change based on your income from wages, interests, or individual pensions.

If you're married or cohabiting, your pension supplement is DKK 4,262 per month, which is lower than the supplement for single people at DKK 8,329 per month.

Here's a breakdown of the monthly state pension amounts in DKK, before taxes, for single and married/cohabiting people in 2025:

This means that single people receive a total of DKK 15,527 per month, while married or cohabiting people receive a total of DKK 11,460 per month.

Curious to learn more? Check out: How Much Does an Rv Depreciate per Year

Your state pension is paid directly into your NemKonto account, a normal bank account you assign at your bank.

To receive your pension, you must have a NemKonto, which is required for all citizens in Denmark who receive payments from public institutions.

If your total income was higher than the income on which your pension was based, you must pay back some of your pension.

On the other hand, if your total income was lower than the income on which your pension was based, you'll have extra pension paid to you.

Your spouse/cohabitant's income is included in the calculation of your pension.

You can receive a supplementary pension benefit if you have a personal supplement percentage higher than zero and your liquid assets as of 1 January amount to less than DKK 103,100.

Your liquid assets can consist of deposits in banks, market value of bonds, mortgage deeds in custody account, and more.

Home equity is not considered part of your liquid assets, nor are incomes that cover your living costs, such as state pension and ATP.

If you're married or cohabitating, your spouse/cohabitants assets are included in the total.

Your economic situation affects your state pension, but income from wages, interests, and individual pensions does not affect the basic amount.

Here's a breakdown of the monthly state pension amount in DKK, before taxes, for single and married/cohabiting individuals:

Your pension supplement will be reduced if your annual income exceeds a certain threshold, which varies depending on your marital status and whether you're a pensioner or not.