Who wants to be a millionaire? I do!

The good news is that more workers are building up pension pots; the bad news is that this could lead to more widespread charges for services

Stephen Gadd

Oct 11, 2018

Well-upholstered pension pots have traditionally been associated with the management classes rather than ordinary workers, but that appears to be changing.

Data collected from two of the largest collective bargaining-related pension funds, Pension Danmark and Industriens Pension, reveals that the number of people who can be classified as millionaires according to their pension pot in traditional working class trades has grown by 1,800 percent over a few years, reports DR Nyheder.

In 2013 there were 4,190 craftsmen, industrial workers or service sector employees with a pension pot worth more than 1 million kroner. Five years later, the number has increased to 75,300

Mission accomplished
Torben Möger Pedersen, the administrative director of Pension Danmark, sees this as an important milestone.

“What we’re seeing now is ‘mission accomplished’. We’ve achieved our goals that we set out 25 years ago: to ensure decent economic conditions for ordinary working people and their families,” he said.

Twenty-five years ago, around 66 percent of ordinary wage-earners only had their state old-age pension and a little from the labour market’s ATP fund to fall back on during their retirement.

The Schlütter government instituted an initiative that meant from 1993 onwards all wage-earners would save a percentage of their wages in a pension pot. To begin with it was less than 1 percent, but for most people this has gradually risen to around 12 percent today.

More service charges
Precisely because there will be more well-heeled pensioners there is also a risk that governments could introduce charges for a number of state services that might include the health service.

“I could easily imagine that in the future we will be discussing a greater degree of self-payment from pensioners,” said Karsten Vrangbæk from the University of Copenhagen’s centre for healthy ageing.

“This will have to be handled carefully because charges like this can have a negative social effect that may result in people not going to their doctor when they need to.”