In 2006 the Danish government brought about an unusual welfare reform. It increased the pension age from 65 to 67 between 2024 and 2027, with the age for early retirement rising from 60 to 62 between 2019 and 2022.

This means that people who are now under 50 will not be able to qualify for an early retirement until they are 62. Similarly, they will also not be able to claim a state pension until they turn 67.

Furthermore, from 2025, the age limits in the retirement system will be indexed to the mean life expectancy of 60 year olds. This means that the average length of time that people spend on early retirement and public pension will be around 19 years. If life expectancy does not change, the early retirement age will stay at 62 years and the pension age at 67.

I came across this nugget of information in The Economist’s survey this week of ageing societies, and supplemented it by Googling around. A 2008 report from the OECD pointed out that:

Adherence to this indexation principle is vital as it forms the backbone of fiscal sustainability: without that, current standards in publicly funded services could not be maintained in the context of population ageing. However, even within the framework of the welfare agreement, it will be difficult to meet growing pressure to raise service standards in areas like healthcare simply through additional public spending.

to make a comment, click here