What happens to my old Riester contract in 2027?

Old and new compared

Example: a couple, both working, with two children born in 2008 or later, gets at most €950 of subsidies a year in the previous system, and only if each of them pays in 4% of their previous year’s income. In the new system it is up to €1,680 if each pays €150 a month.

What a switch means

• Voluntary: Nobody has to switch. Without a switch, your contract continues to receive the previous subsidies.
• For all contracts: The switch applies to all your subsidised pension contracts together, including Riester contracts with an insurance company or bank.
• Spouse: If your spouse is subsidised through your contract because they are not eligible themselves, they follow your system. If you switch, they switch with you. If you stay in the old system, a new contract taken out by your spouse gets no subsidy. That is why your advisor always checks the contracts of both of you.
• Cannot be undone: There is no way back to the old system afterwards.
• New contract from 2027: If you sign a new subsidised contract from 2027, you automatically switch to the new system, with all your existing contracts.

If you use the balance for your home

The home subsidy account (Wohnförderkonto) is the account in which the central subsidy office (Zulagenstelle) records how much subsidised money is in your home. It is taxed in old age. Which rules apply depends on when you use the balance for your home. With a subsidised loan, what counts is when you received it. With an advance loan (Vorausdarlehen), meaning a loan that your home savings contract (Bausparvertrag, a savings contract with a building society) later pays off, what counts is when this pay-off takes place. A switch does not change this.

• Before 1 January 2028: balance used, subsidised loan received or advance loan paid off. Then the old rules remain for your home subsidy account, with or without a switch. It is increased by 2% every year and taxed in old age up to the age of 85.
• Only from 1 January 2028: the new rules apply, with or without a switch. The account is no longer increased and is taxed in the five years after your pension starts.

So for your home, a switch brings neither an advantage nor a disadvantage. The switch is about the subsidies.

When a switch is more likely to suit you

• You pay in at least €30 a month or want to do so in future. Then you get up to €540 basic subsidy a year instead of €175.
• Until now you have paid in less than 4% of your previous year’s income and therefore not received the full subsidy. In the new system every euro counts from €120 a year.
• You have children born before 2008 for whom you still receive child benefit (Kindergeld, the monthly state payment for children). For them the child subsidy rises from €185 to up to €300.

When you should look more closely

• So far you only pay the minimum contribution of €60 a year because your income in the previous year was low. In the old system this gets you the full subsidy, up to €775 with two children. In the new system there is no subsidy below €120 a year, and for €750 you need a contribution of €300.
• You have several Riester contracts that would all switch with you.
• Your spouse is subsidised through your contract because they are not eligible themselves.
• You are thinking of replacing your old contract with a new one. If you switch by making a declaration to your provider, your old contract keeps its terms, for example a low loan interest rate.

Your advisor compares both options for your contracts with you before you sign anything.

Frequently asked questions

Read more

• What changes in 2027 for the Eigenheimrente?
• How much subsidy does a family with children get from 2027?
• This page in German