Germany to replace Riester-Rente with new pension depot in 2027

Germany is set to introduce a new state-subsidized pension depot (Altersvorsorgedepot) on January 1, 2027, which is intended to replace the existing Riester-Rente system. This transition marks a shift in the retirement savings market toward cost-efficiency rather than product complexity.

Scalable Capital has announced plans to compete on price by offering a standard version of the subsidized depot with zero fees for the account, savings plans, and trades. Under this model, costs would primarily stem from the underlying ETF structures, with annual effective costs estimated at a maximum of 0.15 percent, and potentially 0.00 percent in the first year. The law mandates a maximum annual effective cost limit of 1 percent for these products.

Comparisons between the traditional Riester-Rente and the proposed ETF-based model suggest significant differences in long-term returns. Projections indicate that investors using the new depot model with MSCI World ETFs could see substantially higher returns compared to the Riester system, which has historically faced high costs and low gross returns.