The new federal government is planning to introduce the early start pension from 2026. Every child should automatically receive a government-funded portfolio – with the aim of building capital early on and at the same time strengthening their understanding of financial topics.
Early start pension: What is the state planning from 2026?
From January 1, 2026, every school-age child in Germany between the ages of 6 and 17 will automatically receive a state-funded depository. The state plans to pay 10 euros a month into these funded retirement accounts – without families having to take any action. The income remains tax-free until retirement; there are no plans for early payout.
The aim of the measure is to introduce young people to the capital market at an early stage and to raise awareness of private pension provision. As can be seen from the coalition agreement, the federal government wants to increase awareness of wealth creation. According to the Tagesschau report from April 2025, the CDU and SPD also emphasize that this is a system change in pension provision – away from purely pay-as-you-go models and towards more personal responsibility and capital coverage.
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Long-term effect: How much does the state depot bring?
Even small amounts can create amazing wealth over decades – provided they are invested early. According to Tagesschau.de, the government deposit of 10 euros per month over twelve years – a total of 1,440 euros – initially creates an average capital of 2,101.50 euros up to the age of 18, if the money is invested in an ETF savings plan with a 6 percent return.
If this portfolio remains untouched until retirement age, the final capital will be around 39,461 euros. According to insurance expert Bastian Kunkel in an interview with Focus Online, anyone who pays an additional 10 euros a month from the age of 18 can even expect to receive around 81,500 euros when they retire. The decisive factor is less the amount of the contributions, but rather the early start – because the longer the investment period, the stronger the compound interest effect is.
Hurdles and criticism: What is still unclear
As promising as the early start pension sounds, many questions remain unanswered when it comes to the specific design. As Tagesschau.de reports, it is currently unclear who manages the portfolios, how the money is specifically invested and whether there should be a standardized solution for passive investors. There are currently no regulations regarding fee structures, product costs or specifications for suitable financial products. Experts see parallels here to the well-known weaknesses of the Riester pension.
In an interview with the Tagesschau, RWI President Christoph M. Schmidt expressed fundamental doubts about the effectiveness of the model: The state contribution could lead to a false sense of security without additional personal effort, while important financial learning effects are missing. The administrative effort is also high because the funding is linked to attendance at an educational institution. DIW expert Lukas Menkhoff also warns that young people in particular who have had an interrupted educational path – for example during a voluntary social year – could be excluded from funding.
Editorial team finanzen.net