The early-start pension (Frühstart-Rente) is designed as long-term provision for children, so many parents first ask when the money is actually available. The Frühstartrentengesetz (early-start pension act), which the Bundestag adopted on 16 October 2026, sets a clear basic rule: the funded capital is paid out only from the 65th year of life onwards. This guide explains what the act provides and what remains open.
In short: Under the Frühstartrentengesetz as adopted by the Bundestag on 16 October 2026 (Bundestag printed paper 21/8606, government draft Bundesrat printed paper 445/26), payouts of the funded capital should in principle be possible only from the completed 65th year of life. Returns should remain tax-free during the saving phase. The second round in the Bundesrat and promulgation are still pending. Last updated: November 2026.
Key points
- Payouts of the funded capital should in principle be possible only from the 65th year of life.
- According to the Federal Pension Insurance Institution, returns should remain tax-free during the saving phase.
- The draft provides for a state contribution of 10 euros per month per child into a funded retirement depot.
- Under Article 8 the act is to take effect on 1 January 2027, Article 3 on 1 January 2028. The Bundestag adopted it on 16 October 2026, and the Bundesrat (second round) and promulgation are still pending.
Why is the payout limit set at 65?
The draft names the 65th year of life as the basic limit for payouts. The explanatory section of the draft speaks of payouts in principle not being possible before the completed 65th year of life. The statutory text itself contains no corresponding paragraph. Until the law is promulgated, the explanatory memorandum of the draft is the relevant source.
The age limit has a clear logic: the money is meant to work for decades toward old-age provision. The Bundestag did not change the draft on this point. The limit becomes binding with promulgation of the act, and until then it is not yet a rule in force.
How is the money invested until age 65?
The Federal Pension Insurance Institution describes two routes. Parents can open a depot with a financial institution of their choice. If no depot is opened, the funds are to be invested in a state collective investment vehicle.
| Situation | What the draft and the DRV foresee |
|---|---|
| Depot opened with a financial institution | Investment in the chosen depot |
| No depot opened | Investment in a state collective investment vehicle |
The Finance Committee tightened the investment rule for the state solution: under section 24 subsection 3 of the committee version, the funds must be invested exclusively in broadly diversified global equities or equity funds, whereas the government draft required only global diversification. The special fund is to be set up on 1 January 2028. Whether and how the two routes differ in returns and costs is not described in detail in the explanatory memorandum. The guide on the early-start pension without its own depot (in German) looks at this choice separately.
Worked example: how much money flows in by 65?
Assumption: the federal government pays 10 euros per month, and payments start in the sixth year of life. The child is therefore 6 years old, and 59 years pass until the payout at 65. Parents pay nothing extra, and there are no returns and no costs.
| Item (assumption) | Amount |
|---|---|
| State contribution per month | 10 euros |
| State contribution per year | 120 euros |
| Sum of payments over 59 years | 7,080 euros |
| Final balance with returns and costs | depends on returns and costs |
The sum of 7,080 euros shows only the payments. Returns, costs and taxes change the final result, and no return can be derived from the draft. The example gives a sense of scale, not a forecast.
Who is eligible, and from when?
The Federal Pension Insurance Institution names the entitlement for children with a first residence in Germany from the sixth year of life up to adulthood. The starting cohort is 2020. From 2027, according to the Institution, the newly six-year-old children are added each year. The guide on the 2020 birth cohort (in German) explains who benefits first.
What can you clarify today?
- Whether your child meets the conditions according to the Federal Pension Insurance Institution: a first residence in Germany and the right age.
- Whether an identification number exists for the child, since without it the draft grants no entitlement.
- Which costs a possible provider charges for its depot.
- Whether you plan additional payments at all, and in what amount.
Frequently asked questions
Can I access the money earlier?
The draft names the 65th year of life as the basic limit. Whether there are exceptions and under which conditions is not expressly stated in the wording. If you need binding information, ask the Federal Pension Insurance Institution.
Do I have to pay tax on the payout?
Returns should remain tax-free during the saving phase. For the payout, Article 2 of the act in the committee version adds the early-start pension to section 22 number 5 of the Income Tax Act (EStG), so the benefits are taxed together with other retirement provision benefits. Clarify the details of the tax amount with a tax adviser once the act is promulgated. More on returns is in the guide on whether the early-start pension returns are tax-free (in German).
When does the subsidy start?
The draft names the starting cohort 2020 and the start of the rules on 1 January 2027. The Federal Pension Insurance Institution also expects the subsidy to start retroactively on 1 January 2026 for the 2020 birth cohort, with first payments in 2027. The Finance Committee added a special rule for January 2026: for that month the early-start pension is 20 euros instead (section 30 subsection 1 sentence 3), for eligible persons who turn six on 31 December 2025.
What if the law changes again?
Then the promulgated text applies. Until then, the age limit of 65 is a statement of the act as adopted by the Bundestag but not yet promulgated, and not an applicable rule. Do not plan a fixed payout date until the law is in place.
Does the start of the payout change when the child comes of age?
According to the draft’s explanatory memorandum, the age limit of 65 remains in place for payouts. Adulthood matters mainly for transfers, because the rules for switching change at the 18th birthday. For the start of payouts, it is not decisive according to the explanatory memorandum.
Where can I find the current status?
The Federal Pension Insurance Institution publishes the status of the legislative procedure on its page about the early-start pension. You can find the government draft as Bundesrat printed paper 445/26 and the committee report as Bundestag printed paper 21/8606, both on the server of the German Bundestag. Whether the text is adopted unchanged only becomes clear with its promulgation.
For planning, a look at the whole picture helps. The early-start pension is one building block of old-age provision, not a replacement for it. If you consider your own provision and your child’s together, gaps show up sooner.
What to do now
- Follow the further legislative progress (Bundesrat, promulgation) through the pages of the Federal Pension Insurance Institution and wait for the promulgated text.
- Plan with a payout from 65 at the earliest, and arrange other provision for the years before that.
- Before you sign a contract, check what the depot costs and which information the provider supplies.
- Clarify tax questions with a tax adviser as soon as the statutory text is settled.
Related guides
- Retirement 2027: The overview of depot, early-start pension and Riester
- Early-start pension decided? What is settled and what is still open
- Transfer the early-start pension to your own depot
- Which children receive the early-start pension first?
- Are the returns of the early-start pension tax-free? (in German)
Sources: German Bundestag, printed paper 21/8606, committee report of the Finance Committee on the Frühstartrentengesetz (October 2026), German Bundestag, text archive, decision of 16 October 2026, Bundesrat printed paper 445/26, draft of a law introducing an early-start pension (14 August 2026) and Deutsche Rentenversicherung, early-start pension (page status 20 October 2026) (all in German)
Last updated: November 2026. This guide is general information, not individual advice.
