From 2027 nobody can sign a new Riester contract in Germany. Its replacement, the Altersvorsorgedepot, puts savings into funds and ETFs and pays state subsidies of up to €540 a year instead of €175. Providers can only sell it from 1 January 2027, once certified, yet consumer advocates already expect a wave of sales calls.
What does the state pay?
The basic allowance is 50 cents per euro contributed up to €360 a year, then 25 cents per euro up to €1,800. Pay in €1,800 and you receive €540. Each child adds €1 per euro paid in, capped at €300, which €25 a month is enough to reach. Savers under 25 get a one-off €200 bonus. The minimum contribution is €120 a year, which earns €60. You can pay in up to €6,840 annually; €1,800 of that is subsidised. The tax office also checks whether the special-expenses deduction is worth more than the allowance.
The Bundestag passed the reform on 27 March 2026 with the votes of the CDU/CSU and SPD; the Left voted against, the AfD and Greens abstained. The law was promulgated on 26 May.
Where is the catch?
Costs. The state-defined standard depot, with two funds that every provider must offer, is capped at 1.0 per cent effective costs a year, down from 1.5 per cent in the draft. Other products have no cap. The consumer centres expect guarantee and “premium” variants to cost 1.5 to 2.5 per cent annually. During the legislative process the federal consumer organisation vzbv calculated that a product costing 0.2 per cent would grow to about €180,000 over 40 years, against about €80,000 at 1.5 per cent. That was a model for the earlier draft, but it shows why the cap matters.
The economist Ulrike Malmendier (UC Berkeley) told the Bundestag hearing in March that without automatic enrolment “households with little financial education above all” would not be reached. The DGB trade union federation called the model “expensive, advice-intensive and inefficient”. The coalition disagrees: CDU MP Fritz Güntzler described the product as cheaper, more flexible and simpler, and the SPD called the public standard depot a “historic milestone”.
What about old Riester contracts?
Existing contracts are protected. Moving to the new system is voluntary, can incur costs and cannot be reversed. Do not cancel in a hurry: under the old rules €60 of your own money earns the full €175 basic allowance, while the new system needs €360 for the first subsidy tier. The consumer centres advise: “there is no reason for rushed contracts”. Switching provider is free after five years, and the new provider may charge at most €150.
Payouts start at 65 at the earliest and 70 at the latest, as a pension or a withdrawal plan running at least to age 85. Returns are tax-free while saving; payouts are taxed at your personal rate.
And the early-start pension for children?
That is a separate law: €10 a month from the state for children aged 6 to 18, €1,440 in total, starting with the 2020 and 2021 birth cohorts. According to the NWB expert blog the Bundestag passed it on 16 October; we found no information on the Bundesrat. The money is locked until 65, so it cannot pay for a driving licence or university.
Our assessment: for low earners with children, the child allowance is the strongest argument, with a subsidy rate well above Riester. Anyone who only wants ETFs should check whether an unsubsidised depot is cheaper. Binding provider terms will only exist after certification by the Federal Central Tax Office, so until then: compare, and sign nothing over the phone.
Sources: Deutscher Bundestag, Verbraucherzentrale, finanzen.net, NWB Experten-Blog
