A Danish take on finance: ‘hygge’ your pension

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havenifa


Posted on: 2nd Apr 2019

The term ‘hygge’ (pronounces hoo-guh) has been floating around for some time now. If you have never heard this word before, it’s the Danish concept that focuses on living life in a more “cosy” manner. Things such as reading a book by a fire, a hot bowl of soup after walking home in the rain, are considered to be “hygge”. However, it’s not just about getting comfortable and savouring the moment, it’s about general wellbeing. So, can you apply this to your finances? More importantly, can you ‘hygge’ your pension? Keep reading to find out!

‘Hygge’ your pension

Many Danes can enjoy a ‘cosy’ retirement thanks to their public ‘folkepension’ that ensures that those in retirement get a good basic retirement income. Basically, it’s the Danish State Pension.

What’s more, they have long-established company pensions which the Danish government is keen to continue developing. As explained in a recent World Finance article, “Danish companies and institutions have taken a unique level of social responsibility in supporting their employees through pensions savings and insurance services.”

‘Hygge’ life

It’s important to know, however, that ‘hygge’ plays a large role in Danish life, even from birth. Parents receive well-paid, long leave when their children are born. This allows them to connect and care for their newborn’s. Despite the high taxes, many people can afford to put money aside as salaries are also high. As some will choose to downsize when their children leave the family home, more money is also freed up, allowing them to enjoy a more ‘hygge’ life.

But we’re not Danish!

This information is great if you live in Denmark, but what about the UK? Well, we do actually have more in common than one might think. More of us are living longer, which is changing how we need to save for what could be a long retirement.

With that in mind, the UK government is trying to boost the opportunity to save for retirement through auto-enrolment. This is helping us save for life after work, with almost 10 million people auto-enrolled since its introduction 6 years ago.

Living longer

The UK state pension age is increasing, which means there is more reason for you to save into a pension. Whether it be a workplace pension or a personal one, it’s important that you take control of your savings if you want a better future. By taking control, your chances of being able to choose when you stop working are increased. Thanks to the introduction of UK pension freedoms, we can all have a voice in when and how we stop work, or if we want to work less.

Thinking forward

If you want to put away more, but would like help with managing your savings, an independent financial adviser can help. At Haven IFA, we put your future first, so you can relax knowing your savings and investments will provide you with an enjoyable retirement. If you would like to learn more about our services, get in touch to speak to a member of our team.