Financial circumstances of the elderly in Denmark--now and in the coming years. Pension systems and other economic possibilities

Abstract

The situation concerning pensions in Denmark has been changing in recent years. There is a trend for the population itself has to pay into private pension to ensure a satisfactory financial situation after retirement. There are three categories of pensions and supplementary grants influencing the financial situation of the elderly: social-political grants, labour market political grants, and private arrangements. The national retirement pension is paid to everyone in accordance with certain rules. One condition is residence in Denmark for 40 years after reaching the age of 15. The pension age is 67 years. It is possible to receive early retirement pay or to obtain partial pension from the age of 60. This means that the age for retirement from the labour market on average is 62 years. Supplements to the national pension can be given as a net sum. Such a payment, however, makes it more difficult for the elderly person to overview his or her financial circumstances in retirement. The partial pension is a new form of pension which was introduced in 1986. About 2% of the 60-66 year-olds have taken advantage of this possibility, most of them independent trade men. In contrast, 105,000 wage earners are receiving early retirement pay, which is based on unemployment insurance. Certain considerations apply when the social pension is paid in a gross amount. This amount will not be free of tax. A number of special grants for the elderly will be included in the gross amount of the social pension. A system of that sort will make the financial circumstances of the retired person more clear.(ABSTRACT TRUNCATED AT 250 WORDS)