Faroese savers take less risk

Faroese pension funds are asking savers how much risk they are willing to take, as Faroese savers are more risk-averse than their Danish counterparts, resulting in lower returns, reports Kringvarp Føroya.

Faroese pension funds have faced criticism for the low returns on investments, particularly from the LÍV fund. The funds do not manage the investments themselves but rely on professional asset management firms.

According to Johnny í Grótinum, an economist, the low returns are partly due to the savers’ own risk aversion. He cites a 2024 report by the Financial Supervisory Authority, which found that the average return for Faroese pension funds was 3.2%, less than half the 6.8% average return of Danish pension funds.