You must pay tax to the state on the savings you have with The Cost-of-Living Allowance Fund. The tax must be paid no later than the day on which you wish to withdraw your LD Savings. Since 2015, you have been entitled to a tax reduction if the tax is paid to the government before certain deadlines.
The tax credit consists of the reduced tax amount. Once you have paid the reduced tax, the net amount will be credited to your account.
Keep your savings after the discount
The tax can be paid to the government without your savings being paid out. This allows you to continue with an LD Retirement Savings scheme, which can be paid out tax-free whenever you wish.
Letters and deadlines
Around six months after your 60th birthday, you will receive a letter from The Cost-of-Living Allowance Fund regarding a tax credit.
If you have not received a letter from us at least 5 months before your 61st birthday, please contact us. The letter may be in your e-Boks.
You’ll receive the discount automatically
In the letter, we state that we will ensure you receive your discount within the relevant time limit. If you are happy with this, you do not need to do anything.
For the vast majority of people, it will be advantageous to claim the tax credit, as it results in larger payouts.
You receive the discount by paying a tax rate that is lower than the standard rate. It is a requirement that the tax is paid to the government within certain time limits, and we will ensure this happens, unless you choose not to.
If we do not hear from you, we will pay the tax. You can see when this will happen in the letter. Afterwards, you will be able to view the final tax amount by logging into your LD Account.
Important deadline for declining the offer
The deadline for opting out is stated in the letter we will send you. If you have already opted out of your tax credit, you can log in to the self-service portal and see that your savings scheme will continue as before. You will also be able to see the deadline for the tax credit during payouts, which you will then need to keep an eye on yourself.
By declining this offer, you retain the option of transferring your savings into a life annuity or an instalment pension with regular payouts. If, on the other hand, you allow us to pay the reduced tax, you can transfer your LD Savings to other similar pension schemes.
Once the tax has been paid, it cannot be reclaimed from the government. Therefore, if you wish to opt out of the tax credit, you must do so before the deadline specified in our letter.
Once the tax has been paid, the full amount in your LD Retirement Savings account can be withdrawn tax-free. Your right to payouts remains unchanged. You can still request payouts both before and after switching to an LD Retirement Savings account.
