Denmark’s P+ said its members made record levels of additional contributions into the pension scheme during 2020 – behaviour it attributes to several factors including the uncertainty brought on by COVID-19 and the fact banks are now slapping customers with negative interest rates.

The Copenhagen-based pension fund for professionals with higher academic qualifications reported its members paid DKK255m (€34.3m) into the scheme last year over and above their regular contributions.

Mads Stougaard, CFO of P+, said: “Over 36,000 members chose to contribute extra to their pension scheme, which is the highest number ever.”

He said the figures emphasised that P+’s members were aware that the extra payments could create greater security in the long run.

“Not least, the uncertainty associated with the COVID-19 pandemic may also have inspired many to put a little extra aside for the future,” he said.

According to Stougaard, the higher level of additional payments was also an expression of the fact that moving money into pension savings had become increasingly attractive.

“As the banks have introduced negative interest rates, saving up in ordinary deposit accounts is not necessarily an attractive solution,” he said.

The introduction in recent years of an additional tax deduction for pension contributions had also given many people a clear financial incentive to prioritise their pension savings instead, said Stougaard.

The DKK125bn pension fund – formed from the 2019 merger of the Danish pension fund for lawyers and economists, JØP, and the Danish engineers’ pension fund DIP – last week reported a return of 6.65% for 2020 and said it had ramped up its investment risk level over the course of the year.

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