Statistical news focuses on the latest figures and trends in Danmarks Nationalbank’s statistics. Statistical news is targeted at people who want quick insight into current financial data.
Contributions Contribute to a Stable Build-up of the Pension Wealth
The Danes have paid contributions of kr. 1,148 billion to Danish insurance and pension companies since the beginning of 2015. Overall, the pension contributions exceed the pension payouts for the entire period, and thus the net contributions contribute to building up the pension wealth. The contributions have increased steadily, and in 2023, kr. 78 billion have been paid in, which is kr. 2 billion more than the same period the previous year. The pension wealth is also built up from the pension returns. But where the contributions have been more stable over the entire period, the returns have fluctuated more because of the developments in the financial markets.
Pension Contributions of kr. 1,148 billion Since the Start of 2015
Note:
Cumulative figures. The pension wealth is defined here as provisions for future pension obligations (for market and average rate products) in Danish insurance and pension companies. In addition to pension savings in insurance and pension, Danish households also have individual pensions in their own bank deposits and cash deposits.
Contributions Increase Steadily, while Returns Vary
The contributions to pensions have increased steadily since 2015. In the first half of 2023, kr. 78 billion have been paid in, which is higher than all previous first half-years. The contributions have increased, among other things, because of increased employment and higher wages.
Where the contributions are a more stable source for building up the pension wealth, the returns are more fluctuating and follow the developments in the financial markets. Since 2015, the pension returns have been kr. 673 billion. The returns were all the way up to kr. 1,181 billion before 2022 because of progress on the stock markets, while the returns were reduced by kr. 609 billion in 2022 due to financial headwinds. In the first half of 2023, the returns increased again by kr. 102 billion.
Pension Wealth of kr. 3,874 billion
Pension wealth in Danish insurance and pension companies have increased by kr. 936 billion since the first quarter of 2015 and now amounts to kr. 3,874 billion. The increase is a result of a positive return and more contributions than payouts over the entire period. The wealth in market rate has grown more than the wealth in average rate. The wealth in market rate now makes up 45 per cent of the total wealth against one quarter in the first quarter of 2015, and there are several reasons for this: The insurance and pension companies are increasingly offering savings in market rate, and seen over the entire period, savings in market rate have experienced the highest returns, the most contributions, and the fewest payouts compared to savings at average rate.
Pension savings in market rate are characterized by the fact that pension returns follow the underlying investments closely, and that the risk to a greater extent lies with the pension saver. It is a general trend that savings in market rate replaces savings in traditional average rate, where the savers’ return depends on a deposit interest rate set by the individual insurance and pension companies.
45 per cent of the Pension Wealth Is Now in Market Rate
Note:
The pension wealth is defined here as provisions for future pension obligations (for market and average rate products) in Danish insurance and pension companies. In addition to pension savings in insurance and pension, Danish households also have individual pensions in their own bank deposits and cash deposits.