After the Riester pension, a new retirement savings account should offer citizens better return opportunities – including state subsidies and tax exemptions. Now there is a draft law.
If we take stock a good 20 years after the introduction of the Riester pension, financial experts agree: the Riester pension has failed to achieve its actual goal of strengthening private pension provision. The criticisms are that it is too inflexible, too expensive and too bureaucratic.
If Finance Minister Christian Lindner (FDP) has his way, that is exactly what should change now. A new, private pension provision should be created, flexible, closer to the reality of life, less bureaucratic, more rewarding: an eligible pension provision without a guarantee. The idea is to enable more promising investments on the capital market with higher returns – and it is now taking concrete form.
The Federal Ministry of Finance has presented a draft law that formulates the reform of private pension provision. We show what is planned.
The new private pension provision is scheduled to start on January 1, 2026. As things currently stand, citizens can then choose between a new Riester pension and a retirement savings account. Previous Riester savers should be allowed to switch.
The reform of private pension provision should not be confused with the upcoming changes to the statutory pension, which is to be supplemented by the so-called generation capital (formerly stock pension). Read more about this here.
With retirement savings accounts, savers can invest money on the stock market over the long term and widely and thus have the chance of higher returns. Unlike the current Riester, there should be no guarantees of contributions on the paid-in capital. One could say: For the first time there will be an ETF savings plan that will be subsidized by the state in the form of allowances and/or tax advantages. According to Lindner, a “game changer”.
Anyone who decides to have a portfolio should be able to freely choose what they want to invest in: individual stocks, funds or even ETFs are conceivable. Savers can invest monthly, like in a savings plan, or buy securities once. According to Lindner, there should be a positive list of systems that are eligible. Risky leverage products (derivatives) and crypto investments are excluded. Read here what derivatives are.
- Also read: What the Ministry of Finance has already revealed
- Investing in ETFs for beginners: It’s that easy
According to the draft law, every euro paid into the retirement savings account should be subsidized by 20 cents from the federal government – but only up to a maximum of 3,000 euros per year. This corresponds to an allowance of 600 euros per depot holder. For comparison: the previous basic allowance is only 175 euros (more on that here). From 2030, the maximum amount is set to rise to 3,500 euros. It is not clear from the draft whether the 3,000 euros or later 3,500 euros per year is just a maximum limit for funding or also a cap on payments.
According to the plans, if you have children for whom you receive child benefit, you will receive an additional 25 cents per euro paid in from the state. Here, however, the funding limit is already 1,200 euros per year. A maximum of 300 euros in state funding per child is possible. This amount is also available with the previous Riester pension for children born after 2008.
The support for low-income earners is completely new: those who do not earn more than 26,250 euros per year should benefit from a bonus of 175 euros. Improvements are also planned for young people. Anyone who starts their retirement savings account before the age of 25 can receive 200 euros for three years – a total of another 600 euros. So far, the career starter bonus is a one-off amount of 200 euros. Students and people without a job should also be able to receive the new funding.
The basic rule is: Anyone who wants to benefit from state funding should have to pay at least 120 euros per year into their retirement savings account. Previously, a so-called base amount of 60 euros per year applied.
