Germany’s New Retirement Depot Opens to Self-Employed and Civil Servants, Promising Double the Return of Old Riester Plans
Published on 07/14/2026 at 13:56 | Redaktion boerse-global.de
For the first time, self-employed workers and civil servants in Germany will be eligible for a state-subsidised retirement savings product. Starting 1 January 2027, the Altersvorsorgedepot (AVD) replaces the defunct Riester pension, which will cease accepting new business on 31 December 2026. The government expects a wave of sales, with high earners seen as the main beneficiaries.
The AVD comes with an annual state allowance of up to 540 euro plus 300 euro per child and a bonus for career starters. To receive the full subsidy, savers need to contribute a maximum of 1,800 euro per year. Unlike the old model, the accumulation phase is tax-free; withdrawals are taxed at the saver’s personal rate only after age 65. For higher earners, the ability to deduct contributions beyond the allowances makes the product particularly attractive.
Savers can choose among three investment routes:
- Renditeorientiert (return-focused): 100% equities, no guarantees
- Standarddepot: a cost cap of 1 percent
- Classic guaranteed products
The financial gap between the old and new systems is stark. Based on a monthly contribution of 100 euro over 25 years, a Riester contract yields 46,845 euro in final capital. An AVD, by contrast, produces 89,732 euro – a difference of more than 42,000 euro. The gap stems from Riester’s high fees (1.5 to 2.5 percent) and its so-called guarantee brake. The AVD allows cheap ETFs with annual costs of 0.1 to 0.2 percent, and the removal of strict capital guarantees lets the compound interest effect work more powerfully.
Around 16 million Riester contracts remain active. From 2027, savers can transfer the capital from their old contract into the new depot without losing the state allowances they have already received. After five years of contract duration, the switch is free of charge. Financial experts recommend preparing for the required identity verification well ahead of the 1 January 2027 start date, as application volumes are expected to be high.
A separate product, the Kapitalrente, is set to launch in 2028. The Deutsche Bundesbank and the state fund Kenfo are both bidding to manage it. Kenfo currently oversees 24.1 billion euro in assets, generating an annual return of 6.4 percent.
Whether the new depot will close Germany’s pension gap is another question. The government’s pension commission recommends a net replacement rate of at least 70 percent of last net income. The statutory pension level is secured at only 48 percent until 2031. Without private savings, most people will fall short. Government officials emphasize that even a 50-euro monthly savings rate can produce six-figure sums over the long term. But the Sozialverband Deutschland (SoVD) disputes this. A spokesperson argued that many people, especially in low-income regions, simply lack the financial room to save.
The pressure on household budgets is already rising. On 1 July 2026, the average out-of-pocket cost for nursing home care climbed to 3,364 euro per month.
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