There are three types of pension in Denmark: State pensions, labour market pensions and individual pensions.

State pension (folkepension)

The folkepension is state-provided and not related to your employment. It consists of a basic element (grundbeløb), which everybody gets, and a supplement (pensionstillæg), which is adjusted according to whether you live alone or with a spouse or partner. You can also get other supplements depending on your health and income.

To qualify for the basic state-sponsored folkepension, you must have a permanent address in Denmark, have lived in Denmark for at least three years between your 15th birthday and retirement age, and be a Danish citizen.

If you are not a Danish citizen, however, you still qualify for this pension if you have lived in Denmark for at least 10 years between the age of 15 and retirement age. Citizens of EU and EEA countries and Switzerland, as well as the United Kingdom, qualify without Danish citizenship, as do some refugees.

State pension age

Because of a 2017 law change, the age at which you can retire and take out a folkepension depends on when you were born and the age has been gradually raised between 2019 and 2022. If you are born after 1967 the state pension age is now 69.

You can see the relevant breakdown of retirement ages here.

State pension per month before tax in 2022 is 14,019 kroner for a single person and 10,347 kroner for someone who is married or cohabiting. 

ATP (Arbejdsmarkedets Tillægspension)

ATP pensions are a supplementary labour market pension scheme which nearly everyone in Denmark pays into. Deductions are automatically taken out of your pay check – you can see them on your pay slips. 

You only pay a third of your ATP pension contribution while working – you employer pays the other two thirds.

You can read in detail (in Danish) about tariffs, deductions and other factors which determine the ATP pension payout here.

You can check how much ATP pension you can expect to receive at any time by logging into to your account via borger.dk.

Private or individual pension

Anyone in Denmark can join a private pension scheme, and if your company offers a private pension programme, then you will also see line items on your pay slips for employer and employee contributions. 

Denmark has arrangements with certain countries, which means you can still receive your Danish state pension if you move to a country either within or outside the EU. However there may be other requirements, depending which country you are retiring in, which can be found here.

If you live in an EU/EEA country, Switzerland, the USA, India, the Philippines or South Korea, you can be paid the full pension including all the supplements. But if you live outside these countries you can only be paid the basic pension without supplements. There is a guide to applying here.

Pension tax 

If you retire abroad, the payments from your Danish pension scheme, both state and private will be subject to Danish taxation. Pensions are taxed at the Danish income tax rate, which is 37 percent if you earn under 500,000 kroner and 52 percent if you earn over 500,000 kroner.

 

“According to almost every double tax agreement entered by Denmark, Denmark has the taxation right to Danish private pension schemes,” Michael Thomsen, pension expert at Danes Worldwide told The Local.

“The country you’re residing in has the right to tax that pension as well. But due to the the double taxation rule, they have to take into consideration the tax already paid in Denmark. Normally this is higher than most other countries, so it may not trigger a second tax deduction in the country of retirement,” Thomsen explained.

If you want to transfer your ATP pension fund abroad before retirement age, it is “near or less impossible” Thomsen says, as you get a deduction on your ATP pension as an employee and don’t pay tax on employee pension contributions. If you manage to transfer your ATP fund, you will be subject to 60 percent tax, which is the same for taking out the pension early.

 

However it is not a problem to get payments from a Danish ATP pension if you are of retirement age and abroad, it is just subject to tax.

 

For that reason, Thomsen advises only paying into a Danish pension scheme if you plan to live in Denmark for ten or more years.

 

Danes Worldwide pension expert Thomsen advises many expats, especially those on the special expat tax scheme of paying 27 percent income tax for up to seven years, of investing in a non-taxable pension scheme.

 

“With these schemes, you don’t get any deductions when you make payments into the scheme and you can invest the funds where you like. Then when you move country, you can take the money with you and as you haven’t had any deductions, you won’t be taxed when you later withdraw the money,” Thomsen said.

 

There is also a new pan-European personal pension product (PEPP) which has recently launched, to allow savers to easily take their private pension with them if they move within the European Union.

 

Whenever the saver changes the country of residence, the provider will open a new sub-account for that country. If the provider cannot offer such option, savers have the right to switch provider free of charge. The applicable taxation will be that of the country of residence.

 

“Your pension from abroad will be taxed according to that country and then, as a Danish resident, you will have to include those pension payments in your Danish income tax assessment.

 

“When your tax is calculated, the tax you’re already paying on your pension from abroad, will be taken into consideration. If this is less than Danish tax then you will have to pay the difference,” Thomsen told The Local.

 

There are some variations to the rules, depending on the country, Thomsen explained. For example the Denmark-U.S. double tax agreement means pensions from the U.S. can only be subject to U.S. taxation, so it is excluded from Danish tax.

 

Regarding a state pension from abroad, it depends on the rules of individual countries as to whether you are entitled to have your foreign pension (udenlandsk pension) paid out in Denmark. Those claiming pensions from an EU/EEA Member State, Switzerland or the United Kingdom can apply online here.

 

You can also still qualify for the Danish state pension if you have lived and worked abroad but the amount you will receive depends on how many years you have lived in Denmark. If you want to apply for a Danish pension and foreign pension, you need to contact Udbetaling Danmark.