Pension and Early Retirement for the Self-Employed

As an employee, pension savings are typically part of your employment contract, but as a self-employed person you do not save automatically and must therefore make active decisions.

On this page, you can read more about state pension, early retirement, and your options for saving for retirement through an individual pension plan, ATP, or your business.

State Pension

Like everyone else, you are entitled to the state pension when you reach the statutory retirement age. However, the state pension will likely not be enough if you are accustomed to earning more in your business. And as a self‑employed person, you do not automatically have an occupational pension. This also means you are not covered by the insurances that come with occupational pension schemes, such as life insurance.

Individual Pension Savings

You can establish an individual pension savings plan through a pension provider or a bank.

When you contribute to a pension scheme, the money is locked until a certain age. In return, you benefit from low taxation on investment returns. In a pension scheme, you only pay 15.3% tax on returns, which is lower than anywhere else. In most cases, you will also pay less tax when the money is eventually paid out than if you leave all funds in your business. Pension savings are also protected from creditors.

When you take out a pension plan, you also gain access to various insurances that can protect you and your family if the unexpected happens, such as illness, accident, or death. For example, you receive disability insurance, which can provide a monthly payout if you lose the ability to work due to serious illness or stress.

If you have a sole proprietorship, you can contribute up to 30 percent of your business profit before interest and depreciation each year into a lifelong pension scheme with full tax deduction.

If you have a private limited company and pay yourself a salary, you can deduct your contributions.

IDA works to ensure that more self-employed people save in a pension scheme, and IDA recommends that you establish pension savings with P+, the Pension Fund for Academics. You can read more about P+'s offers here and contact them for personal and non-binding advice here.

ATP Pension

ATP Lifelong Pension is mandatory for employees. But as a self‑employed person, you must actively sign up if you want to be included in the scheme.

ATP Lifelong Pension provides a small but guaranteed payout in addition to the state pension. ATP also includes life insurance, which ensures your next of kin receive a lump sum if you pass away.

Read more about ATP for the self-employed

Save Through Your Business

As a self-employed person, you can choose to build up savings within your business. The advantage is that you always have access to the funds because—unlike a pension scheme—they are not locked in until you reach retirement age. On the other hand, you will miss out on the favourable tax treatment that pension schemes offer. You should therefore be aware that, as a general rule, you will pay a higher effective tax rate if you save exclusively through your business.

If you run a sole proprietorship and choose to sell it, you can pay a taxable capital gain of up to DKK 3,285,400 (2025) into a pension scheme with tax relief.

Early Retirement Pay for the Self-Employed

As a self-employed person, you can contribute to an early retirement scheme through an unemployment insurance fund (A-kasse), just like employees. When the time comes to make use of your early retirement pay, you are also allowed to work alongside receiving benefits. This must take place under one of four early retirement schemes. Read about the four schemes at Borger.dk (in Danish), and note that your working hours will be deducted from your early retirement pay.

If you have further questions about early retirement pay, you can contact Akademikernes A-Kasse.

Learn More About Pensions for the Self-Employed

If you would like to learn more about pensions for the self-employed, you can watch a recording of IDA’s webinar Do You Need to Consider Pension as a Self-Employed Professional? on IDA Play (in Danish).

In the webinar, Gerner Steen Gravang, wealth and pension adviser at P+, reviews pension schemes for the self-employed. You will also see concrete calculation examples illustrating how to make the most of your assets.