In a landmark decision, Denmark has become the first European country to set its national retirement age beyond the 60s, with lawmakers voting to raise it to 70. This move, which will apply to individuals born after December 31, 1970, marks a significant shift in the country’s approach to welfare and employment. The current retirement age in Denmark is 67 on average, though it can extend to 69 for those born on or after January 1, 1967. The change is aimed at ensuring “proper welfare for future generations,” according to Employment Minister Ane Halsboe-Jørgensen.

The Demographic Context

Denmark, with a population of nearly 6 million, has a significant number of individuals nearing retirement age. Statistics Denmark reports that approximately 713,000 people are between the ages of 60 and 69, while around 580,000 are aged 70 to 79. This demographic shift underscores the necessity for sustainable welfare policies that can support an aging population without placing undue strain on the economy.

The Economic and Social Drivers

The decision to raise the retirement age is driven by several factors, including improved health in old age, increased life expectancy, and the growing trend of remote working. These factors have enabled more people to continue working well into their later years. According to F&P, the Danish trade association for insurance companies and pension funds, approximately 80,000 people over the state pension age are currently employed. This trend is attributed to favorable economic conditions, greater employer flexibility, better financial incentives, and a growing desire among individuals to remain active in the workforce.

Public Reaction and Political Divide

While the government and some stakeholders see the move as a pragmatic solution to demographic and economic challenges, it has not been without controversy. The socialist Red-Green Alliance has condemned the decision, labeling it “unreasonably high” and criticizing it in light of the “great” pension conditions enjoyed by many ministers who can retire at age 60. Pelle Dragsted, a member of parliament for the party, expressed his disbelief, noting that many individuals in physically demanding jobs, such as teachers and scaffolders, feel they cannot continue working until 70.

Comparative Perspectives

Denmark’s decision places it at the forefront of countries with the highest retirement ages globally, alongside Libya. This move contrasts sharply with recent events in other countries. In France, for instance, over a million people protested in March 2023 against a proposed increase in the retirement age to 64, which is still six years below Denmark’s new threshold. Similarly, in September, the Chinese government passed legislation to raise the retirement age for men from 60 to 63 and for women from 50 and 55 to 55 and 58, respectively.

The UK and US Contexts

In the UK, the state pension age is set to rise to 67 between 2026 and 2028, with a potential review that could push it to 68. The United States has a similar retirement age, though some Social Security benefits are available from age 62. Despite better health and increased life expectancy, research indicates that financial necessity often drives Americans to work longer. Remote working and other flexible employment options have also facilitated this trend.

The Broader Implications

Denmark’s decision to raise the retirement age to 70 reflects a broader trend of countries grappling with the economic and social challenges posed by aging populations. While the move is intended to ensure the sustainability of welfare systems, it also highlights the need for policies that support older workers. This includes measures to accommodate the health needs of an aging workforce, provide flexible working arrangements, and ensure that employment opportunities remain accessible.

A Balanced Approach for the Future

Denmark’s bold step to raise the retirement age to 70 is a testament to the country’s commitment to long-term economic stability and social welfare. However, it also underscores the importance of balancing this approach with considerations for the well-being and capabilities of older workers. As other countries face similar demographic challenges, Denmark’s experience offers valuable insights into the complexities of managing an aging workforce and ensuring the sustainability of welfare systems.

The success of this policy will depend on the government’s ability to implement supportive measures that enable older individuals to continue working in a healthy and fulfilling manner. This includes addressing the concerns of those in physically demanding jobs and ensuring that the transition to a higher retirement age is managed with empathy and practical support. Denmark’s pioneering move sets a precedent for other countries, highlighting the need for innovative and balanced solutions to the challenges of an aging population.