All about this insurance: Private pension
Should I take out a German private pension if I might leave Germany?
Insurance broker / Insurance questions / Private pension
Is private pension insurance worth it in Germany?
In short
As your only retirement savings, often not. Costs of about 0.4 to over 1.3 percent a year and a guaranteed interest rate of 1 percent eat into returns. It makes sense if you want an income for life, however long you live. If you might leave Germany or want flexible savings, an ETF savings plan is often the better fit.
What it costs
Guide figures from published tests and consumer information.
| Example | Typical range |
|---|---|
| Effective costs per tariff | about 0.4 to over 1.3 percent a year |
| Guaranteed interest for new contracts since 2025 | 1 percent |
| Guaranteed interest for contracts from 2022 to 2024 | 0.25 percent |
Guide values as of September 2026 from published tests. Your pension depends on contributions, term and tariff; we obtain the exact quote for you.
Worked example
Age 35, EUR 100 a month until 67
How strongly costs work over the full term.
| Paid in over 32 years | EUR 38,400 |
| Tariff with 0.4 percent costs a year | small loss of return |
| Tariff with 1.3 percent costs a year | several thousand euros less capital |
With the same investment, the low-cost tariff pays a noticeably higher pension.
What speaks for a private pension
Private pension insurance (private Rentenversicherung) pays for life. That protects you from running out of savings before you die.
If you take the money as a pension, only part of it is taxed in Germany, the so-called income share (Ertragsanteil).
What speaks against it
Acquisition and administration costs are often high. If you cancel early, you frequently get back less than you paid in.
The pension only pays off if you live long, because insurers calculate with a high life expectancy.
| Type | Assessment |
|---|---|
| Traditional with guarantee | safe, but low return |
| Unit-linked | more upside, watch the costs |
| Net tariff with ETFs | often the cheapest insurance option |
| ETF savings plan without insurance | flexible, no lifelong guarantee |
| Rürup pension | for self-employed people with a high tax rate |
If you might leave Germany
Many expats do not know whether they will stay. A private pension contract can usually continue after you move, but check how your new country taxes the payouts and whether you can keep paying from a foreign account. Cancelling in the first years costs money, so a long contract only suits you if you are fairly sure.
Your statutory pension (gesetzliche Rente) works differently. Within the EU and with countries that have a social security agreement with Germany, your entitlements are usually kept. Citizens of other countries who leave can often have their own share of contributions refunded after a waiting period. State-subsidised Riester contracts may require you to repay the allowances if you move outside the EU.
When it pays off
If you stick with it for a long time, watch the costs and really want a lifelong income. It is unsuitable for short-term saving.
Step by step
- Decide whether you want a lifelong income or flexible capital.
- Ask yourself how likely it is that you will stay in Germany.
- Compare the effective costs of the offers.
- Check the choice of funds.
- Choose a contribution you can keep paying for a long time.
- Check subsidised options such as the Rürup pension or a company pension.
Checklist
- Effective costs below 1 percent
- Contribution holidays possible
- Low-cost funds available
- Choice between pension and lump sum
- Guaranteed pension factor
- Contract can continue if you move abroad
Common mistakes
- Looking only at the guarantee
- Choosing a contribution that is too high and cancelling later
- Not comparing costs
- Signing a long contract although you may leave Germany in a few years
Questions and answers
Frequently asked
Is private pension insurance safe?
A statutory protection fund steps in if the insurer goes bust. A high return is not guaranteed, though.
Which is better, an ETF or pension insurance?
An ETF savings plan is more flexible and usually cheaper. The insurance in return guarantees an income for life.
Can I cancel?
Yes, but in the first years often at a loss. Instead of cancelling you can usually make the contract paid-up and stop contributions.
How is the pension taxed in Germany?
Only with the income share: if payments start at 67, that is 17 percent of the pension.
What happens to my contract if I move abroad?
It usually continues. Taxation then depends on your new country and any tax treaty with Germany, so get tax advice before you move.
Is it worth it for older people?
With a short term hardly, because the costs have little time to even out.
Sources
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NAMMERT Assekuradeur GmbH, insurance broker licensed under section 34d(1) of the German Trade Regulation Act, broker register no. D-C08Q-TOSD4-37. For boat and yacht insurance we act as underwriting agency, not as broker. Statutory disclosure (German) · Updated