Danish pension investors are not reducing the level of risk in their portfolios despite turbulent markets. According to research by Sampension, Danes are concerned that the market roller-coaster is having a negative impact on their pension savings but do not see it as a reason to reduce risk.

The research, based on a survey of 1,000 Danes by Epinion on behalf of Sampension, shows that only 14% of those who are concerned about the turbulence are considering adjusting their investments to lower risk and even fewer have acted on reducing risk.

Over half, or 54%, are very much, very or somewhat concerned that the war in Ukraine and the downturn in markets will have a negative effect on their pension assets. Some 28% are less concerned and 11% not very concerned.

Those between 57-65 years of age are the most concerned about negative effects on their pension assets but at the same time this group is the least likely to consider lowering or have lowered the risk in their portfolios.

Anne-Louise Lindkvist, head of marketing and customer services at Sampension, said these concerns were natural considering the turbulence combined with rising inflation, interest rates and the war in Ukraine.

She added that it is important to remember that pension savings are for the long-term and that over time short-term turbulence will have little impact which is why it is important not to panic because markets can change direction very quickly again.

Lindkvist said that if members are truly concerned, which might be the case if they are retired or close to retirement age where the investment horizon is shorter, they could consider lowering their investment risk.

She, however, pointed out that members would need to be aware of potential future losses over time because they would miss out on the returns once the market rebound.

Sampension is one of Denmark’s largest pension providers with over 300,000 members and assets of over DKK305bn.

For the full year 2021 the fund returned 9%. Despite market turbulence in the first quarter, Sampension returned -0.98% for customers with moderate risk portfolios and 15 years away from retirement.

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