The end of new Riester contracts will come at the turn of the year 2027 and will be replaced by the retirement savings account. But what does that actually mean for you? Don’t worry: your existing provisions are safe. Still, simply “freezing” the status quo is rarely the best strategy. If you know the three central options for legacy contracts, you can often make your capital work more efficiently for you. It is important to weigh things up wisely – because while a change offers new opportunities, a particular decision almost always turns out to be an expensive trap.
Option 1: Keep the contract and let it continue
If you keep your Riester contract, nothing changes. The current funding system with fixed basic allowances of 175 euros and child allowances of up to 300 euros continues. The contribution guarantee remains in effect and the money will be managed as before.
This can make sense for low-income earners with children who receive disproportionately high allowances under the old system. Even those who are close to retirement and benefit from the contribution guarantee have little reason to change. In our guide to retirement savings accounts, we show why the old support system remains cheaper for certain groups.
Disadvantage: The high costs of classic Riester products, often 2 to 3 percent per year, also continue – and eat up further returns over the remaining years.
Option 2: Switch to the new system
Riester savers can transfer their existing assets into a retirement savings account or a new guaranteed product. The allowances and tax advantages received so far do not have to be repaid. The old provider may charge a maximum of 150 euros in the first five years, after which the change is free. Consent from the previous provider is not required.
Alternatively, you can keep the old contract with the same provider, but switch to the new funding system – i.e. use the contribution-dependent allowances instead of the fixed Riester allowances. This can be worthwhile if you want to pay higher contributions in the future and benefit more from the proportional allowance system.
For whom the change is particularly attractive: Singles and high earners without children who had little benefit from the fixed Riester allowances anyway and whose contracts cause high ongoing costs. In a retirement portfolio with a cheap ETF savings plan, the costs fall to a fraction – and the full share quota becomes possible.
Option 3: Shut down the contract
If you don’t want to continue paying or change, you can make the contract contribution-free. The credit remains invested, the allowances previously received remain, but no new contributions and allowances are made. This can make sense if the old contract has been running for a long time and high closing costs have already been paid off – then the existing capital continues to work without new costs being incurred.
At the same time, a new retirement savings account will be opened in 2027 and will be used with the more favorable conditions. This way you get the best of both worlds.
Under no circumstances: cancel
Termination is almost always the most expensive mistake. In the event of use that is detrimental to the funding – and this includes termination – all allowances and tax advantages received must be repaid. Anyone who has received Riester allowances for over 15 years will lose several thousand euros in one fell swoop. There are also possible cancellation fees from the provider.
There is practically no case in which termination makes economic sense. Even a poorly performing contract with high costs is better off shutting down than terminating it.
Conclusion: Check yes, cancel no
Riester savers should use the remaining time until 2027 to examine their contract: How high are the running costs? What allowances do I receive? Am I better off in the new system? The answer is individual – but one rule applies without exception: never cancel. All options and calculation examples in the detailed guide.
