What happens to my Riester contract after the 2027 reform?
In short
After the 2027 reform nothing happens to your Riester contract unless you act: it keeps the old allowances of up to EUR 175 a year plus up to EUR 300 per child. From 1 January 2027 you may switch voluntarily to the new subsidy of up to EUR 540 a year. Each provider may charge at most EUR 150 for the switch.
Allowances and cost limits set by law, as of October 2026.
Example
Typical range
Basic allowance, old Riester contract
up to EUR 175 a year
Basic allowance under the new rules
up to EUR 540 a year with EUR 1,800 own payment
Child allowance under the new rules
EUR 300 per child from EUR 25 a month
Switching cost, old provider
at most EUR 150, EUR 0 after five years
Admin fee, new provider
at most EUR 150 once
Cost cap in the standard depot
1.0 percent a year
As of 14 October 2026, based on the law and federal government information.
Sales costs of new contracts outside the standard depot are not capped and depend on the provider.
Worked example
Single, EUR 40,000 gross, same own payment
How the basic allowance changes when the subsidy in the existing contract is converted to the new rules. Tax relief through the special expenses deduction is not included.
Own payment (4 percent minus EUR 175 allowance)
EUR 1,425 a year
Basic allowance, old rules
EUR 175
Basic allowance, new rules (360 × 0.50 plus 1,065 × 0.25)
EUR 446.25
One off switching costs if the balance moves
EUR 0 to 300
About EUR 271 more allowance a year. Even the full EUR 300 switching cost would be recovered in just over a year, provided the new contract is not more expensive.
What changes automatically
Nothing. Your Riester contract keeps its guarantee, its terms and its allowances (Zulagen). If you keep paying at least 4 percent of last year's gross income minus the allowances, you still get the full old basic allowance of EUR 175 in 2027.
A Riester contract you stopped paying into also stays as it is after the reform. Allowances already credited remain in the contract as long as you do not cancel it and take the money out.
Your options from 1 January 2027
The reform adds two new routes: you convert the subsidy inside your existing contract to the new rules, or you move the balance into a new contract such as the new pension depot (Altersvorsorgedepot). According to the German pension insurance, no allowances have to be paid back for this.
Option
Subsidy
Cost
Suits
Keep the Riester contract as it is
old allowances, EUR 175 basic
none
short time to retirement, good guarantee
Convert the subsidy inside the contract
new allowances up to EUR 540
depends on provider
people who want to save more
Move the balance to a new contract
new allowances, subsidy moves with you
up to EUR 150 old plus up to EUR 150 new
long horizon, equity investing without guarantee
Cancel and cash out
all allowances and tax relief repaid
high
almost never sensible
When switching after the reform pays off
Switching mainly pays off if you want to save more than the old minimum. Under the old Riester rules the basic allowance stopped at EUR 175; under the new rules every euro up to EUR 1,800 of your own payment earns something.
Parents gain most: after the reform the full child allowance of EUR 300 is paid from a saving rate of just EUR 25 a month. With 20 or 30 years to go, the depot without guarantee also allows more equities.
If you might leave Germany
This matters for many international employees. New allowances generally require that you are insured in the German statutory pension. If you move to another EU or EEA country, credited allowances are generally safe, but new ones usually stop, so a switch for the higher allowance brings little.
If you move outside the EU and EEA, repayment rules can apply. Ask the provider and the central allowance office (Zentrale Zulagenstelle für Altersvermögen) in writing before you move, and do not cancel in a hurry.
What is new in the payout phase
Under the new rules, payout plans with a fixed term that run at least until age 85 are allowed alongside lifelong annuities. Up to 30 percent can be taken as a lump sum at the start of the payout.
Guarantees are no longer mandatory. Products with an 80 or 100 percent guarantee remain available if you want security, at the price of lower expected returns.
What still follows by regulation
The low cost standard depot, whose costs are capped at 1.0 percent a year, is still being set out by regulation. Many providers will only present new tariffs around the turn of the year, so there is no reason to rush.
Step by step
Find your latest annual statement: balance, guarantee, running costs.
Decide how long you will stay in Germany and how much you want to save.
Ask your current provider in writing whether it offers conversion to the new rules and at what cost.
Only then compare offers for a new contract or a pension depot.
Weigh switching costs and new sales costs against the extra allowance.
Checklist
Keep paying the minimum own contribution until you have decided
Keep your allowance application up to date
Check the signing date: under five years, the provider switch costs up to EUR 150
Know the guaranteed rate of the old contract before giving it up
Check the rules for your case before any move abroad
Common mistakes
Cancelling the Riester contract out of frustration and repaying all allowances
Switching in early 2027 under pressure although there is no deadline
Looking only at the higher allowance and ignoring new sales costs
Switching for the higher allowance shortly before leaving Germany
Questions and answers
Frequently asked
What happens to my Riester contract if I do nothing?
It continues as before, with the old allowances and the agreed guarantee.
There is no automatic conversion.
Do I have to repay allowances if I switch?
No.
When you switch to the new subsidy,
the allowances you received stay with you and move into the new rules.
Can I still sign a classic Riester contract in 2026?
Yes, until 31 December 2026.
Check carefully whether that makes sense when a higher subsidy starts in January.
Do I get EUR 540 in my old contract too?
Only if you convert the subsidy to the new rules.
Otherwise the basic allowance stays at a maximum of EUR 175.
Is the new pension depot riskier?
Yes, without a guarantee its value moves with the markets.
Over long periods this tends to even out, but a crash shortly before retirement can hurt.
I am leaving Germany next year. Should I switch?
Usually not for the allowance, because new allowances tend to stop once you are no longer insured
