The new Pension Depot (Altersvorsorgedepot) starts on 1 January 2027, and from then on no new Riester plans can be taken out. Many Riester savers are now wondering whether to get rid of their plan while they still can. The short answer: cancelling is almost always the worst of the three options.
What changes for existing Riester plans
At first, nothing. Riester plans taken out by 31 December 2026 are grandfathered. Your plan continues with the existing subsidies: a basic allowance of 175 euros, 300 euros per child born in 2008 or later and 185 euros for older children, as long as you pay in at least 4 percent of your previous year's income minus the allowances. You don't need to apply for anything or watch any deadline.
What's new are two options. Within your plan, you can switch to the new subsidy rules of the Pension Depot on application, once and irrevocably. Or you move your savings into a new retirement savings contract without repaying the subsidies you've received. That's how the Federal Ministry of Finance describes it.
Option 1: Cancel, and why it usually costs you money
If you cancel your Riester plan and cash out before retirement, that counts as harmful use (förderschädliche Verwendung). The central allowance office then claims back all allowances, plus the tax benefits from the special expenses deduction. The gains inside the plan are taxed. What's left is often little more than your own contributions, and with expensive plans in the early years it can be even less.
Right now that hurts twice over. From 2027, the subsidy-neutral switch gives you a way out of a poor plan that keeps your subsidies intact. Cancel before then and you throw that option away. If you no longer want to pay in, you can make the plan contribution-free and let it rest instead.
Did you know?
An example: a mother with two children, both born after 2008, has received the full subsidy for ten years. That's a 175-euro basic allowance plus two child allowances of 300 euros, 775 euros a year in total. If she cancels now, she has to repay around 7,750 euros in allowances, plus any tax benefits. If she keeps the plan or transfers it from 2027, every euro of that stays hers.
Option 2: Keep, when the old plan is the better choice
Not every Riester plan is bad. Older plans often include a guaranteed interest rate or annuity factor you can no longer get today. If you're only a few years from retirement, you gain little from the higher equity share in the Pension Depot but carry the full market risk. Keeping your plan makes sense above all if:
- Costs are low: A low-cost fund-based Riester plan with a high ETF share doesn't need replacing.
- Retirement is close: With less than about ten years to go, the contribution guarantee is often worth more than the extra return potential.
- Your plan has guaranteed terms: A high guaranteed interest rate or a fixed annuity factor is lost when you switch.
- Your income is low and you have children: Under the old rules, a minimum contribution of 60 euros a year is enough for the full allowances. Calculate whether the new subsidy pays you more before making the irrevocable switch.
Option 3: Transfer to the Pension Depot
For younger savers with an expensive plan and a long way to retirement, switching is usually the most interesting option. In the Pension Depot you can invest without a contribution guarantee. The basic subsidy there is 50 percent on the first 360 euros of your own contributions and 25 percent on further contributions up to 1,800 euros, so up to 540 euros a year, plus up to 300 euros per child. For the standard product, costs are capped by law at 1 percent a year.
The cost of the switch itself matters. From five years after the contract was taken out, your current provider must allow the switch free of charge, and the new provider may charge an administrative fee of at most 150 euros. Younger contracts can involve switching, acquisition and sales costs. And without a guarantee, you carry the market risk yourself, even shortly before retirement.
What to do before December 2026
- Don't cancel: Waiting for the Pension Depot to launch costs you nothing, cancelling costs you all your subsidies.
- Gather your documents: Your latest annual statement shows your balance, effective costs and guarantee. The date you took out the plan decides whether switching is free.
- Check your allowances: Make sure you've received the full subsidy in recent years and that your standing allowance application is up to date, for example after a child was born.
- Don't take out a Riester plan in a last-minute panic: New contracts are possible until 31 December 2026, but only pay off in exceptional cases.
With the checklist for switching to the Pension Depot you can pre-check your plan yourself. All details on the new subsidies are in the guide to the Pension Depot from 2027, and the existing system is explained on the Riester pension page. As your fiduciary representative, I put your old plan and the new options side by side before you commit.
Get notified when the Pension Depot launches
The Altersvorsorgedepot (the new state-subsidised Pension Depot) starts on 1 January 2027. Leave your email and I will let you know when it launches, with an overview of the subsidies and the most important deadlines. No spam, unsubscribe at any time. Until then: use my free checklist to see whether switching your Riester plan makes sense.
Checklist: your Riester plan before 2027
- Have you ruled out cancelling unless you're in a genuine emergency?
- Do you know your plan's balance, effective costs and start date?
- Do you know whether your plan includes a guaranteed interest rate or annuity factor?
- Have you received the full allowance in recent years?
- Have you compared the old and new subsidies before switching irrevocably?