Denmark to Have Europe’s Highest Retirement Age After Parliament Approves Increase to 70 by 2040
Denmark’s parliament has passed a law gradually raising the official retirement age to 70 by 2040, making it the highest in Europe. The change will apply to everyone born after 31 December 1970.
Since 2006, Denmark has automatically adjusted the retirement age based on life expectancy, reviewing it every five years. Currently set at 67, it will first increase to 68 in 2030, then to 69 in 2035, before reaching 70 in 2040.
The law was approved on Thursday with broad support, passing by 81 votes in favor to 21 against.
Denmark’s retirement age system is unique in Europe because it automatically adjusts based on increases in life expectancy. This means the retirement age isn’t fixed—it rises as people live longer, ensuring the pension system remains sustainable. Here’s how it works in detail:
1. Current Retirement Age & Future Increases
- 2024: The official retirement age for the state pension (Folkepension) is 66.
- 2027: It will increase to 67 (as per the 2011 pension reform).
- Beyond 2030: The retirement age will continue rising in step with life expectancy, likely reaching 68-69 by 2035 and potentially 72 by 2050.
2. How the Automatic Adjustment Works
Denmark calculates retirement age based on:
- Average life expectancy at age 60 (updated every 5 years).
- A fixed “retirement window” (the expected number of years in retirement, currently around 14.5 years).
Formula:
Retirement Age = 60 + (Average remaining lifespan at 60 – 14.5)
- If Danes live longer, the retirement age increases to keep the pension system balanced.
- The government reviews adjustments every 5 years (next review in 2025).
3. Comparison with Other European Countries
Denmark already has one of the highest retirement ages, but a few others are also raising theirs:
- Italy: Gradually moving to 71 by 2050 (linked to life expectancy).
- Norway: Currently 67, also adjusting for longevity.
- UK, Germany, France: Mostly fixed at 66-67, with some planned increases (e.g., Germany to 68 by 2031).
4. Why Denmark’s System Is Unique
- No political battles: Unlike France (where pension reforms spark protests), Denmark’s automatic system avoids yearly debates.
- Long-term sustainability: Ensures pensions remain affordable as the workforce shrinks.
- Flexibility: Workers can retire earlier (from age 61) via private pensions, but the state pension kicks in later.
5. Public Reaction & Challenges
- Support: Many Danes accept the system due to strong trust in government and high pension savings.
- Criticism: Some argue it unfairly affects manual laborers with shorter life expectancies.