Danish government proposes higher early retirement benefit

The Danish government plans to increase the monthly early retirement benefit by DKK 3,095 and expand access to the scheme from 1 January 2027.

The changes concern the early retirement scheme known in Denmark as “Arne pension”, which is aimed at people who have spent many years in the labour market.

Under the proposal, the monthly benefit will increase from DKK 15,650 to DKK 18,745 at 2026 levels. The increase will also apply to people who are already receiving the benefit.

The government also proposes keeping the minimum age for early retirement at 64 for people born between 1963 and 1965. This would cancel a planned increase in the age threshold to 65 from 1 January 2027.

According to the government, the changes are expected to result in around 7,400 additional full-year recipients choosing early retirement by 2030.

People born between 1963 and 1965 would be able to receive early retirement for one, two, three or four years depending on whether they have accumulated between 41 and 44 years in the labour market by the age of 61.

Under the current rules, the requirement for these age groups is between 42 and 44 years. Lowering the threshold to 41 years means that some people who are currently not eligible would become entitled to one year of early retirement.

“Everyone should be able to look forward to a dignified and secure retirement. That is why, from 1 January, we are significantly strengthening the right to early retirement for Danes with the longest working lives, so that more people have the opportunity to retire a little earlier,” Employment and Gender Equality Minister Ane Halsboe-Jørgensen said.

“And we are increasing the benefit – including for those who already receive Arne pension. In this way, we ensure that more people can retire with dignity and greater financial security.”

The higher monthly benefit would bring early retirement payments into line with the senior pension paid to married or cohabiting recipients.

The government also plans to present further measures aimed at making it more attractive for people receiving early retirement benefits or voluntary early retirement pay to continue contributing to the labour market. This would involve easing existing rules that reduce benefits when recipients have other income.

“We want a pension system that is perceived as fair. The generations facing a higher state pension age should not at the same time see their opportunities for early retirement deteriorate,” Halsboe-Jørgensen said.

The government expects to introduce legislation on the changes during the coming parliamentary session, with the measures scheduled to take effect on 1 January 2027.