The Rürup pension (Basisrente): a large German tax deduction with strings attached
The Basisrente, usually called the Rürup pension, is Germany's tax-favoured private pension. In 2026 you can deduct contributions of up to €30,826 from taxable income, €61,652 for couples filing jointly. In return the law locks the money away: it is paid from age 62 at the earliest, only as a monthly pension for life, and never as a lump sum. It matters most to the self-employed, who have no employer scheme.
It suits freelancers and self-employed people who do not pay into the German state pension, and employees in a high tax bracket. It only makes sense if you are sure you will not need the money before retirement and expect to be taxed in Germany for the years in which you deduct. You cannot cancel, borrow against or cash in the contract. If you may leave Germany within a few years, look closely at how your future country of residence would tax the pension before you sign.
How the deduction works, and why it differs from a SIPP or an IRA
Contributions count as special expenses (Sonderausgaben) in your German tax return. Since 2023 they are deductible in full, in 2026 up to €30,826 a year, or €61,652 for married couples and registered partners assessed together. The ceiling is linked to the maximum contribution to the miners' pension scheme and goes up in most years.
The ceiling is shared. Everything you and your employer pay into the German state pension, or into a professional pension fund (Versorgungswerk) for doctors, lawyers or architects, is counted first. A well-paid employee therefore has far less room than a freelancer who pays nothing into the state scheme.
A simplified example without solidarity surcharge or church tax: pay in €10,000 at a marginal rate of 42% and your tax bill drops by roughly €4,200. Unlike a UK SIPP there is no tax-free lump sum later, and unlike a US IRA you cannot withdraw early against a penalty. The lock is absolute.
What the law forbids
German income tax law only recognises contracts whose benefits cannot be inherited, transferred, pledged, sold or converted into capital. The contract pays a monthly pension for life that must not start before your 62nd birthday. The only exception is a very small pension: if it falls below a statutory threshold, €39.55 a month in 2026, the insurer may settle it with a single payment.
You cannot surrender the policy. If you stop paying, the contract becomes paid-up and the balance stays invested until retirement. Every Rürup contract must be certified under the Altersvorsorgeverträge-Zertifizierungsgesetz, and the certificate number appears in the policy documents. Check for it before you sign.
Tax later, and what happens if you move abroad
The deduction is a deferral. The pension is taxed when it is paid: 84% of it is taxable for people whose payments start in 2026, and the share rises by half a percentage point for each later starting year until pensions that begin in 2058 or later are taxed in full. The gain comes from the gap between your tax rate while working and your rate in retirement.
If you retire outside Germany, which country may tax the pension depends on the double taxation agreement between Germany and your country of residence. The rules differ from treaty to treaty, so this needs a tax adviser, not a rule of thumb. We arrange insurance contracts and do not give tax advice.
Death, partners and disability cover
The balance cannot be left to heirs. The only permitted death benefit is a pension for your spouse or registered civil partner and for children as long as German child benefit (Kindergeld) is payable for them. An unmarried partner receives nothing, however long you have lived together. Without eligible survivors the balance stays with the pool of insured people.
You may add occupational disability cover to the contract, and that part of the premium is then deductible too, provided more than half of the premium goes towards the retirement pension. The drawback: a disability pension paid from a Rürup contract is taxed like the retirement pension, and the cover is tied to a contract you cannot leave.
What is covered
Monthly retirement pension for life from the agreed start date, age 62 at the earliest
Guaranteed pension factor or guaranteed minimum pension, depending on the product
Survivor's pension for a spouse, registered partner or children with child benefit entitlement, if agreed
Guarantee period whose remaining payments go to eligible survivors as a pension
Top-up payments during the term, for example in December after a good year
Premium holiday, reduction of premiums and paid-up status
Waiver of premiums or a pension on occupational disability, if included
Immediate pension against a single premium for people close to retirement
What is not covered
No lump sum, not even a partial one (except for very small pensions)
No surrender value, because the contract cannot be cancelled
No policy loan, assignment or pledge
No payment to heirs other than the eligible survivors
No pension before your 62nd birthday
No guaranteed return on the fund-linked part
Who needs it
Freelancers and self-employed people in Germany without compulsory pension insurance
High-earning employees whose ceiling is not used up by state pension contributions
People a few years from retirement with high income who want to deduct single premiums
Members of a professional pension fund who want to add to their pension
Anyone who wants an income that cannot run out, however long they live
Who does not need it
Anyone who may need the money before retirement, for a business, a home or a lean period
People who pay little German income tax: without the deduction only the lock remains
People who plan to leave Germany soon and have few years in which to deduct
Anyone who has not yet insured their ability to work
Wheel of misfortune
Spin the wheel of bad luck
Six things that really happen. The wheel picks yours and shows who pays.
Cost:
Budget policy Strong policy
See all six cases
No clients for two years, the contract rests, guarantee and later pension shrink. Budget policy: pays in part, Strong policy: pays. Basic products only offer paid-up status, sometimes with a deduction. Strong ones allow pauses, lower premiums and a restart without a deadline.
Insurer cuts the pension factor, less monthly pension per €10,000 of balance, for life. Budget policy: pays in part, Strong policy: pays. A Rürup contract has no lump sum as a way out. A guaranteed factor with a best-of check matters more here than in any other pension product.
Death at 58, single, no children, the entire balance, often six figures. Budget policy: does not pay, Strong policy: does not pay. The law forbids payment to heirs. Without a spouse or children entitled to child benefit the balance stays with the pool of insured people.
Death three years into retirement, the remaining balance after three years of pension. Budget policy: does not pay, Strong policy: pays. Without a rider the pension ends on death. With a guarantee period or survivor's pension it continues for the spouse.
Moving home, want the cash, the balance stays locked in Germany until 62. Budget policy: does not pay, Strong policy: does not pay. No product may pay out or lend against the balance, otherwise it loses its certification. The pension is paid later, wherever you live.
Unable to work at 45, no income, no premiums, a small pension. Budget policy: does not pay, Strong policy: pays in part. With a premium waiver included, the insurer keeps paying into the contract. Your income is only replaced by a separate disability pension.
What it costs
You set the contribution yourself. Many freelancers pay a small monthly amount and top up at the end of the year once they know their profit. What you compare is therefore not the premium but costs and the pension factor: the effective cost figure shows by how many percentage points charges reduce the yearly return.
What drives the premium
Acquisition costs, spread over at least five years for regular premiums
Charges on top-ups and single premiums
Ongoing administration and fund charges
Charges during the payout phase
Level of the premium guarantee you choose
Riders such as a survivor's pension or disability cover
We deliberately give no price range because you decide the contribution. Costs, pension factor and guarantees are stated in the offer and in the product information sheet. Tax figures as of 2026.
The policy levels on the market
01
Traditional Rürup pension
Savings earn a guaranteed interest rate plus bonuses from the insurer's general fund. Predictable, with modest return expectations over long terms.
02
Unit-linked with a selectable guarantee
Part of the premiums is guaranteed at retirement, the rest is invested in funds. The higher the guarantee, the less money works in the markets.
03
Unit-linked without guarantee
The whole balance is invested in funds and moves with the markets. A guaranteed pension factor and automatic de-risking before retirement then matter most.
04
Immediate pension for a single premium
One larger payment is converted into a pension straight away. Used by older people with high income in their last working years.
How to recognise a good policy
Criterion
Minimum standard
Strong policy
Why it matters
Pension factor
stated, but the insurer may reduce it later
guaranteed, with a best-of check at retirement
With no lump sum available, the factor alone decides what your balance turns into.
Top-up payments
allowed with a high minimum amount
at any time, low minimum, no consent of the insurer needed
The self-employed often know only in December how much they want to deduct.
Minimum premium
fixed monthly premium
low minimum that can be reduced and raised again freely
The contract has to survive a bad business year.
Paid-up status
possible with a deduction
no deduction, payments can resume without a deadline
As you cannot cancel, this is the only way out.
Charges
disclosed in the product information sheet
low effective costs and low charges on top-ups
The money is locked for decades, so charges bite for decades.
Survivor protection
no benefit on death
balance paid as a pension to spouse or children, guarantee period selectable
Otherwise the whole balance is lost on early death.
Start of pension
fixed date
can be brought forward to 62 or postponed
Few freelancers know at 40 when they will stop working.
Funds and de-risking
few funds, switches on request
low-cost index funds, free switches, automatic de-risking before retirement
You cannot sit out a market fall just before the pension starts.
Change of provider
not addressed
transfer to another certified contract provided for, costs stated
It is the only way to leave a poor contract.
Insurers on the German market
Many German life insurers offer Rürup contracts, as do a few fund companies with savings plans. Contracts differ in pension factor, charges and how flexibly you can top up. The list shows the market and does not say which insurers we work with.
Insurer
Background
Allianz
Germany's largest life insurer, sold through tied agents and brokers
Alte Leipziger
mutual insurer based near Frankfurt, mainly sold through brokers
Stuttgarter
mutual insurer, broker distribution
LV 1871
Munich mutual, broker distribution
Volkswohl Bund
Dortmund mutual, broker distribution
WWK
Munich mutual, agents and brokers
HDI
life insurer of the Talanx group, brokers and agents
Swiss Life
German arm of the Swiss group, financial advisers and brokers
Württembergische
life insurer of the W&W group, own sales force and brokers
Debeka
mutual with its own sales force, not available through brokers
Invested in the insurer's general fund with a guaranteed interest rate.
Unit-linked Basisrente
Savings invested in funds, with or without a premium guarantee at retirement.
Index-linked Basisrente
Participation in an index, with gains locked in once a year.
Single-premium Basisrente
Immediate pension, the single premium is deductible up to the ceiling.
Basisrente with disability cover
Retirement pension plus a pension or premium waiver on occupational disability in one contract.
Myth or truth
True or false?
Five things people say about this insurance. Guess first, then see the answer.
Rürup contributions are 100% deductible in 2026.
This is true.
True, since 2023 and up to the ceiling of €30,826. State pension and pension fund contributions are counted against that ceiling first.
Only the self-employed can take out a Rürup pension.
This is false.
False. Any taxpayer in Germany can. The self-employed without compulsory pension simply have the most room, because their ceiling is still unused.
If I leave Germany I can cash the contract in.
This is false.
False. There is no surrender and no lump sum, whatever your reason. The contract is made paid-up and pays a pension from 62 at the earliest.
An unmarried partner gets nothing if I die.
This is true.
True. Benefits may only go as a pension to a spouse, a registered partner or children entitled to child benefit. Marriage changes the answer, a will does not.
The pension from a Rürup contract is tax-free.
This is false.
False. It is taxed on payout, 84% of it for pensions starting in 2026 and all of it from 2058. The tax advantage lies in the saving years.
Common mistakes
Signing although the money may be needed before retirement
Using the full ceiling without subtracting state pension contributions and the employer's share
Counting the tax refund and forgetting that the pension will be taxed
Agreeing a high fixed monthly premium instead of starting small and topping up
Assuming an unmarried partner is protected
Signing shortly before leaving Germany without checking the tax treaty
Frequently asked questions
Questions and answers
Frequently asked
How much can I deduct in 2026?
Up to €30,826, or €61,652 for couples assessed jointly, and the full amount counts.
Your contributions to the German state pension, including the employer's share,
and to a professional pension fund are subtracted first.
The remainder can be filled with Rürup contributions.
Can I take the money as a lump sum?
No.
The law only allows a monthly pension for life, from age 62 at the earliest.
A single payment is possible only for very small pensions below the statutory threshold,
€39.55 a month in 2026.
Can I cancel the contract?
No.
You can reduce or pause premiums or make the contract paid-up.
The balance stays invested and is converted into a pension later.
That is why flexibility on premiums is one of the main things to check.
What happens if I die before retirement?
Without a rider nothing is paid.
With survivor protection the balance is paid as a pension to your spouse,
registered partner or children entitled to child benefit.
Nobody else may receive anything.
Do I need to be self-employed?
No.
Anyone who pays income tax in Germany can take out a contract and deduct the premiums.
The self-employed simply have the most room under the ceiling because they often pay nothing into
the state pension.
How is the pension taxed later?
On payout.
If payments start in 2026, 84% of the pension is taxable,
half a point more for each later starting year and 100% from 2058.
The percentage of your starting year fixes the tax-free part.
Can I pay in a single amount at the end of the year?
Yes, if the contract allows top-ups.
The deduction applies in the year of payment,
so the money has to reach the provider by 31 December.
Check the minimum amount and the charges on top-ups.
Can I switch provider?
The balance can only be moved to another certified Rürup contract,
and only if the policy conditions provide for it.
Nothing is paid out to you.
Whether a transfer is possible and what it costs is set out in the conditions.
What changes in 2027?
A pension reform replaces the Riester scheme with a new subsidised product from 1 January 2027,
which for the first time is also open to the self-employed.
The Rürup pension continues alongside it with its own ceiling and rules.
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