An annuity certain is a pension savings scheme which provides a monthly benefit for a number of years. In general, your annuity certain is paid for 10 years, but you have the possibility of choosing a longer payment period of up to 30 years. This makes the annuity certain a good supplement to the lifelong retirement pension providing you with higher benefits at the beginning of your retirement.

You do not pay tax of your contributions to an annuity certain. When the annuity certain is paid, it is taxed as personal income. This means that you must pay tax of your monthly pension benefit as you do with your salary. The pension benefits are, however, not subject to payment of labour market contributions (8 percent).

Advantages of an annuity certain

• A  monthly payment for a number of years.
• You do not pay tax of your contribution payments. If you pay the top tax rate, you will benefit from a tax relief of up to 52.06 percent.
• Low taxation: You only pay 15.3 percent in pension return tax.
• With P+ Life cycle you can choose your desired risk tolerance level.
• Your savings are creditor protected until payment starts.
• Your savings always go to your surviving relatives if you die - unless you have chosen otherwise.
• Flexibililty: An annuity certain may be converted into a lifelong retirement pension.

Restrictions on an annuity certain

• The payment of benefits is discontinued after a number of years.
• You cannot have the entire savings paid as a lump sum.
• You can as a maximum pay DKK 63,100 annually (2024).
• The annuity certain may be set off against your early retirement benefits and additional state pension.

Are you approaching retirement?

If you are approaching your retirement age and have started planning your retirement, you can read more about what you should consider and pay attention to here