Children Get a Head Start on Retirement Savings

Germany has approved a new early-start pension scheme that opens state-funded retirement investment accounts for children aged six to 18, giving them a financial foundation decades before adulthood.

“This reform gives young people a real chance to build long-term security early in life,” said Hubertus Heil, Federal Minister of Labour and Social Affairs.

The programme, known as the Frühstart-Rente, provides a guaranteed state contribution of ten euros per month per child, invested within a new, simpler private pension system that replaces the existing Riester scheme. Accounts will be created automatically if families do not opt in, ensuring universal access. Launching in 2027 with retroactive payments from 2026 for some cohorts, the reform is designed to strengthen retirement savings across generations as the population ages.