Old age savings - get your pension disbursed at once
With an old-age savings scheme, you can get your savings disbursed as a lump sum. You decide when you want to have your old-age savings disbursed – as long as it is not before you reach the earliest retirement age of your pension scheme. And furthermore, the disbursement is tax-free.
A lump sum pension provides freedom
With an old-age savings scheme, you will get a lump sum that you can use in any way you like. It gives you the freedom to, for example, travel the world, buy a new car or refurbish your home.
You will get:
- a good supplement to your other pension savings.
- your old-age savings disbursed as a lump sum.
- a disbursement free of taxes and dues.
Tax regulations – how much can you contribute to your old-age savings scheme (non-deductible)
Your age determines how much you can contribute to your old-age savings scheme without being subject to duties:
- If you have seven years or less until state pension age or are a state pensioner, you may contribute up to DKK 58,900 (2024) a year*.
- If you have more than seven years until state pension age, you may contribute up to DKK 9,100 (2024) a year.
Limits on contributions to old-age savings schemes
The limit on contributions to an old-age savings scheme is a combined amount regardless of whether you have old-age savings under pension schemes with other companies.
*Please note that disbursements from a deductible pension scheme, e.g. a whole life annuity scheme or an annuity certain scheme taking place 10 years before your state pension age or later are disqualifying and mean that you cannot contribute more than DKK 9,100 (2024) a year to your old-age savings scheme. If your contribution still exceeds the lower limit (DKK 9,100 (2024) a year), you will have to pay 40% tax on the part of the contribution that exceeds the bottom limit. However, the tax is automatically reduced to 4% if you transfer the excess amount to a tax-deductible pension scheme the following year, such as an annuity certain scheme.
The rules on disqualifying payments apply from 1 April 2018 across all schemes in all companies.
Disbursement of your old-age savings scheme is tax-free
You are exempt from both tax and duties on disbursements from your old-age savings scheme – as long as these do not take place before you reach earliest retirement age , as stated in your pension scheme.
If you wish to have your old-age savings, or part of it, disbursed before this point in time, and it is possible for your pension scheme, you must pay a charge of 20% to the state plus an additional fee.
You will not be deducted from contributions to your old-age savings scheme
When you make contributions to old-age savings schemes, you cannot deduct your contributions from your taxable income.
You pay 15.30% (2021-2024) tax on the investment return you receive on your pension savings.
Please note that you can set up an old-age savings scheme no later than 20 years after reaching your earliest retriement age.
Offsetting against public benefits
Old-age savings deposits made via your employer no longer affect the public benefits of your household.
The previous negative impact on the household public benefits, resulting from contributions to old-age savings, has been eliminated with the adoption of new regulations in this area (May 2024). Going forward, there will thus be no impact on any income-related public benefits, such as student grants, free daycare subsidies, housing benefits, early retirement and state pensions, even if you save up in an old-age savings scheme.
More about old-age savings schemes
If you pass away before your pension savings have been disbursed in full or in part, your pension savings will be disbursed to your family - regardless of whether you have retired or not.
The disbursement is free from taxes and duties. And if you have nominated your spouse or registered partner as the beneficiary of your pension savings, he or she will not have to pay estate tax.
You can provide a more solid safety net for yourself and your family by connecting various insurance covers to your pension savings. This could be, for example, a children's pension scheme or a cover for reduced earning capacity.