Altersvorsorgedepot 2027: Germany's new subsidised pension account explained in English

Passed, core rules apply from 1 January 2027 Pension Reform Act (Altersvorsorgereformgesetz) · BGBl. 2026 I Nr. 156 · checked on 23 October 2026

Passed by the Bundestag, Bundesrat approval pending Early Start Pension (Frühstart-Rente) · Plenarprotokoll 21/103, p. 13037 and 13051 · checked on 23 October 2026

Who can use it

• Employees paying into the German statutory pension insurance (gesetzliche Rentenversicherung), which covers most employees in Germany.
• Civil servants (Beamte), if they give their consent to data sharing.
• New from 2027: self-employed people under 67 with business or freelance income who file a German tax return for the year.
• New from 2027: employed members of professional pension schemes (Versorgungswerke), for example doctors or lawyers, with consent.
• Spouses of eligible people, through an indirect entitlement with a lower subsidy (at most 175 €).

Parents on parental leave are covered too: the first 36 months after a birth count as child-raising time with statutory pension insurance.

How much the state pays

• Basic subsidy (Grundzulage): 50 % on the first 360 € and 25 % on the part up to 1,800 €.
• Child subsidy (Kinderzulage): 100 % of your contribution, at most 300 € per child, for as long as German child benefit (Kindergeld) is paid. 25 € a month is enough for the full amount.
• Starter bonus: a one-off 200 € if you are under 25 at the start of the contribution year.
• Tax relief: the tax office checks automatically whether deducting your contributions plus subsidy (up to 1,800 € plus subsidy) saves more tax than the subsidy. If so, you get the difference back. This mainly helps higher earners.

You must pay in at least 120 € a year to receive any subsidy. The amount of 6,840 € often quoted online is the maximum payment per contract, not the tax deduction.

What the money is invested in, costs and payout

• Account without guarantee (Altersvorsorgedepot): investment funds up to risk class 5 and euro government bonds.
• Standard account (Standarddepot): two funds, costs capped at 1.0 % a year, automatic shift to lower risk before retirement.
• Guaranteed products: 80 % or 100 % of contributions guaranteed at the start of payout.
• Payout: starts between 65 and 70, as a lifelong pension or a withdrawal plan until at least 85; up to 30 % can be taken as a lump sum. Payouts are taxed as income.
• Before retirement: taking the money out early means repaying subsidies and tax relief.

Providers can be life insurers, banks, building societies and fund companies. Contracts must be certified, which is possible from 1 January 2027 at the earliest.

Already have a Riester contract?

Contracts signed before 1 January 2027 continue under the old rules. You can switch to the new subsidy rules by an irrevocable declaration, or transfer the capital to a new contract without tax. Important: if you sign any new subsidised contract after 31 December 2026, all your contracts move to the new rules automatically. For people on a low income with children, the old rules can pay more, so check before signing anything new.

Early Start Pension for children (Frühstart-Rente)

This is a separate law. The Bundestag passed it on 16 October 2026; the Bundesrat still has to approve it. According to the Bundestag's decision, the state would pay 10 € a month into an investment account in the child's name, from age 6 until the 18th birthday, at most 1,440 € plus returns. The first eligible children are those born in 2020. Parents do not apply separately: the provider applies when the contract is signed. The money stays invested until retirement.

Health insurance in retirement

Whether German health and long-term care contributions are due on payouts depends on how you are insured as a pensioner:

• Compulsory pensioners' health insurance (KVdR): no contributions on payouts.
• Voluntary statutory insurance (freiwillig versichert): contributions are generally due, roughly a fifth of the payout at 2026 rates.
• Private health insurance: premiums do not depend on income, so payouts change nothing.

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