Germany introduces new state-subsidized savings account to replace Riester pension

Germany plans to replace the unpopular Riester pension scheme with a new, state-subsidized savings account starting in 2027. The reform aims to make private retirement planning more attractive, flexible, and cost-effective. The new "Altersvorsorgedepot" will allow savers to invest in a wider range of funds and ETFs, including 100% equity options, with capped fees. It will also introduce a tiered subsidy system based on individual contributions, potentially offering up to €480 annually, plus bonuses for young savers and parents. Existing Riester contracts will be protected, and savers can switch to the new system without penalty. However, eligibility for subsidies remains limited to those in the statutory pension system, excluding many self-employed individuals.