Insurance broker / Insurance questions / Private pension

Is the Riester pension still worth it in Germany?

In short

Often yes for families with children and a modest income, usually not for single people on a good salary. The state adds EUR 175 a year plus up to EUR 300 per child, which is a lot when your own share stays small. On a middle income, costs and cautious pension calculations eat up most of the benefit. New contracts on the old model are only possible until the end of 2026.

Request a quote +49 3375 29 12 77

Is the Riester pension still worth it in Germany?

What it costs

Legal values for 2026 and guide figures from published analyses.

Example	Typical range
Basic allowance	EUR 175 a year
Child allowance, child born before 2008	EUR 185 a year
Child allowance, child born from 2008	EUR 300 a year
Minimum own contribution	4 percent of last year's gross income, at least EUR 60 a year
Maximum tax deduction	EUR 2,100 a year, up to EUR 4,200 for couples
Effective costs of many contracts	up to about 1.5 percent a year

Allowances and limits are set by law, as of September 2026. Costs are guide figures from published analyses and differ by contract; the figures for your contract are in the annual statement (Standmitteilung). Rules for moving abroad depend on your case, this is not tax advice.

Worked example

Family, EUR 30,000 gross, two children born from 2008

This is how small your own share gets when child allowances are involved.

Gross income last year	EUR 30,000
4 percent of that	EUR 1,200
Basic allowance and two child allowances	EUR 775
Your own contribution per year	EUR 425

Of EUR 1,200 going into the contract, you pay EUR 425 yourself. As long as the child allowances run, that is hard to beat. When they stop, or if you plan to leave the EU, calculate again.

How the subsidy really works

Riester is a state-subsidised private pension for people who pay into the German statutory pension, such as employees. You get EUR 175 a year, plus EUR 185 per child born before 2008 and EUR 300 per child born from 2008. To get the full amount, 4 percent of your previous year's gross income must go into the contract, at most EUR 2,100.

The allowances count towards those 4 percent. Your own share is only the rest, but at least EUR 60 a year. That is why Riester is strong for families on a low income and weak for single people with a good salary.

Case	Allowances per year	Your own contribution
EUR 20,000 gross, three children born from 2008	EUR 1,075	EUR 60
EUR 30,000 gross, two children born from 2008	EUR 775	EUR 425
EUR 35,000 gross, one child born from 2008	EUR 475	EUR 925
EUR 45,000 gross, no children	EUR 175	EUR 1,625

What matters if you came from abroad

Many international employees do not know whether they will stay. If you move to another EU or EEA country, the allowances you already received are generally safe, but new ones usually stop once you no longer pay into the German statutory pension.

If you move outside the EU and EEA, you may have to pay the allowances and tax benefits back, in particular once the pension starts. The rules have changed several times, so ask the provider and the central allowance office (Zentrale Zulagenstelle) before you move. If your stay in Germany is likely to be short, Riester is rarely the right choice.

When it does not pay off

Single people on a middle or high income only get the basic allowance but carry the full own contribution. Published calculations often show only about one percentage point of extra return compared with unsubsidised saving.

Two more brakes: the pension is fully taxed in retirement, and providers calculate with a very long life expectancy, which lowers the monthly payout. Effective costs of around 1.5 percent a year are common and cost a lot over decades.

What changes from 2027

The German parliament passed the reform of subsidised private pensions on 27 March 2026. The new products start on 1 January 2027, and new contracts on the old Riester model are no longer planned after that.

The plan is an allowance linked to what you save: 50 cents per euro up to EUR 360 own contribution a year and 25 cents per euro on further contributions up to EUR 1,800, together up to EUR 540. Existing contracts keep running, switching is voluntary and may cost fees. Do not cancel anything in a hurry.

Step by step

Check whether you pay into the German statutory pension, otherwise you are usually not eligible.
Be honest about how long you expect to stay in Germany and where you may move.
Add up the allowances you are entitled to this year.
Take 4 percent of last year's gross income and subtract the allowances: that is your own contribution.
Look at the costs and compare them with an unsubsidised ETF savings plan.
Decide before the end of 2026 whether a new contract on the old model still makes sense for you.

Checklist

Permanent allowance application (Dauerzulagenantrag) filed and up to date
Own contribution high enough for the full allowance
Children with their year of birth registered in the contract
Income changes reported to the provider
Plans to move abroad checked with the provider before you go

Common mistakes

Paying in too little and only getting part of the allowances
Signing up for a short stay in Germany and losing allowances when moving outside the EU
Forgetting to report a new income after parental leave
Cancelling an old contract in frustration instead of stopping payments

Questions and answers

Frequently asked

Can I get Riester as a foreign employee?

Usually yes, if you pay into the German statutory pension. Your nationality does not matter. Self-employed people outside the statutory pension are usually not eligible themselves.

What happens to my Riester contract if I leave Germany?

Within the EU and EEA, allowances already paid are generally safe. Outside the EU and EEA they may have to be repaid. Ask your provider before you move.

Is Riester worth it without children?

Usually not much. You only get the EUR 175 basic allowance but pay the full own contribution. On an average income, published calculations often show only about one percentage point of extra return.

Is the Riester pension taxed?

Yes, fully at your personal tax rate in retirement. In return, contributions and allowances stay untaxed while you save.

Should I cancel my contract now?

Cancelling means repaying allowances and tax benefits. Check first whether stopping payments or switching to the new subsidy from 2027 suits you better.

What happens to my contract in 2027?

It keeps running with its existing rules. Switching to the new subsidy is voluntary and may cost fees.

Sources

NAMMERT insurance broker

Request a quote: Private pension

We compare several insurers and come back with a proposal. Free for you; the insurer pays our fee. You can write in English.

1Who is it for?

Personal My company

2Which insurance?

Choose as many as you like. For each one, the details an insurer needs for a quote appear below.

Personal

Business

Please review all my existing policies

3Details

Private pension insurance in Germany

Which type of pension are you interested in? * Year of birth * Employment status in Germany * Planned contribution * Planned retirement age How important is a guarantee? * Existing pension contracts and plans For example a pension from your home country, a German company pension, how long you plan to stay

4Your current policy

Current insurer Policy ends on What matters more to you?

5How can we reach you?

Name * Email * Phone Postcode Town Preferred contact Anything else we should know