Danish government unveils major new early retirement plan

Danish government unveils major new early retirement plan
PM Mette Frederiksen presents the new pensions plan. Photo: Henning Bagger/Ritzau Scanpix
A new pensions model unveiled by the Danish government on Tuesday could enable as many as 38,000 people to take early retirement by 2022, the government said.

The figure is expected increase to 49,000 by 2025, the governing Social Democratic party said at a press conference. As many as 22,000 of the 38,000 are expected to take the opportunity to retire early.

The pensions reform is aimed at people in physically-demanding jobs who are approaching retirement age, and has been a central part of Social Democrat policy since the 2019 general election campaign.

“You should be able to stop working before you are worn down,” Prime Minister Mette Frederiksen said.

“Pension life should be good. It should mean some good years with time to pursue your interests and be with your family. It should be a right,” she said.

The government proposal for the right to early pension applies to persons who have been on the labour market for at least 42 years by the time they reach the age of 61.

Included in the proposal is a ‘staircase’ model which allows pension to be taken 1 year early after 42 years of working, 2 years early after 43 years, and 3 years early after 44 years.

The pension will be 13,550 kroner monthly before tax, with the option of earning 24,000 kroner tax-free annually.

The pension, which can be supplemented with payouts from private pensions, is reduced for individuals with private pensions of over 2 million kroner.

Three billion kroner annually will be budgeted for the pension, according to the proposal.

Denmark’s current retirement age is 66 years, but it is scheduled to be gradually increased in the coming years.

READ ALSO: Working in Denmark? Here's what you need to know about pensions


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