Whether to keep your Riester contract running or cancel it is the most common question around the reform of subsidised private pensions. The law does not force any step, but it changes the alternatives. This guide covers the decision for your own contract; the reform itself is explained in Riester-Reform 2027 (in German).
Quick answer: Existing Riester contracts continue: contracts concluded before 1 January 2027 keep the previous rules until the payout phase begins, and you can irrevocably switch to the new rules (section 52(50a) EStG, Bundestag paper 21/4996). Cancelling before the payout phase can count as a harmful use and trigger repayment of subsidies. Last updated: November 2026.
Key points
- The Bundesrat consented to the Altersvorsorgereformgesetz (pension account reform act) on 8 May 2026. New subsidy rules and products apply from 1 January 2027.
- A Riester contract does not have to be cancelled. The German pension insurance (Deutsche Rentenversicherung) refers to grandfathering for existing contracts.
- If you cancel, section 93 of the Income Tax Act (EStG) puts the repayment of subsidies at risk. A transfer to another retirement provision contract is not a harmful use.
- Old contracts keep their basic subsidy of 175 euros a year until you switch to the new rules. Those provide up to 540 euros of basic subsidy and a minimum contribution of 120 euros.
- A new contract alongside the old one pulls the existing contract into the new rules, according to the pension insurance.
What happens to my Riester contract after the reform?
Your contract stays in place. According to the committee recommendation of the finance committee, contracts concluded before 1 January 2027 keep the previous rules until the payout phase begins. You can, however, declare irrevocably that the new rules apply to all of your contracts (Bundestag paper 21/4996). The pension insurance describes this route as a declaration and expressly mentions grandfathering (page last updated 17 September 2026).
For the payout phase the following applies: without a different agreement it starts at age 62 for contracts from 2012 to 2026 and at 60 for earlier ones (section 7b(1) AltZertG, consolidated version). Under the law, existing contracts can be adjusted by mutual agreement so that a residual annuitisation in payout plans no longer applies.
What does cancelling cost?
Cancelling a Riester contract before the payout phase begins is in principle a harmful use under section 93(1) EStG. The consequence is repayment of the subsidies paid and of the tax amounts determined. An exception under section 93(2) is the transfer of the capital to another retirement provision contract.
A worked example shows the order of magnitude. Assumption: you have received the full basic subsidy of 175 euros for ten years.
- The subsidies amount to 1,750 euros.
- In the case of a harmful use these subsidies must be repaid.
- Added to that are the tax advantages from the special expenses deduction, as far as they were determined.
- The amount paid out to you also depends on investment performance and the costs incurred in the contract, which your provider has to disclose.
The example only shows the logic. The actual sum depends on your contract and your tax situation. Before you cancel, ask the provider to state the repayment amounts in writing and check whether a transfer to another contract is the better alternative.
Keep it, suspend contributions, cancel or switch: how do the routes differ?
| Route | Subsidy | Repayment of subsidies | What to watch |
|---|---|---|---|
| Keep paying contributions | Subsidy under previous law, 175 euros basic | No | Check costs and guarantee of the contract |
| Suspend contributions | No new subsidy for years without contributions | No, as long as the contract stays in place | Possibility and terms depend on the contract conditions |
| Cancel and pay out | Lapses | Yes, under section 93 EStG | Payout before retirement is a harmful use |
| Switch to the new rules | Up to 540 euros basic, 120 euros minimum contribution | No | The declaration is irrevocable and covers all contracts |
| Transfer to a new contract | New subsidy within the new contract | No, according to the pension insurance the previous subsidy need not be repaid | Switching costs are capped by law |
How a switch works in detail and what it costs is covered in Riester wechseln (in German). The subsidy amounts are compared in Altersvorsorgedepot Zulage berechnen (in German).
When does keeping the contract make sense?
The rules mean you do not have to rush. Keeping the contract speaks in its favour if it has low costs, you value a guarantee and the end of the savings phase is near. If you are close to the payout phase, there is little time to benefit from a switch. Saving in parallel is also possible, but it has an effect you should know: if you take out a new contract in addition, the new rules automatically apply to your existing contract as well, according to the pension insurance.
When does a change make sense?
A look at the alternatives is worthwhile if your contract has high running costs or if the minimum own contribution of 4 percent of the previous year income (up to 2,100 euros) is less favourable for you than the new minimum of 120 euros a year. A switch into an Altersvorsorgedepot also means product features change: for the new products the pension insurance names time-limited payout plans until age 85 instead of the lifelong Riester pension. The depot without guarantee bears the investment risk entirely, while the guarantee product secures 80 or 100 percent of paid-in contributions.
| Criterion | Existing Riester contract | Altersvorsorgedepot (from 1 January 2027) |
|---|---|---|
| Basic subsidy | 175 euros a year, as of November 2026 | Up to 540 euros a year |
| Child subsidy | 185 euros (born up to 2007) or 300 euros (from 2008) | Up to 300 euros per child |
| Minimum own contribution | 4 percent of previous year income, at most 2,100 euros | 120 euros a year |
| Payout | Depends on contract, start at 60 or 62 under the law | Payout plan until at least 85, start without agreement at 65 |
Frequently asked questions
Do I have to act in 2026?
No. The law sets no deadline for existing contracts. There is a deadline for new contracts, because contracts under the old version may no longer be sold after the end of 31 December 2026.
Do I lose entitlements when I switch to the new rules?
Under the committee recommendation the declaration is irrevocable and covers all your contracts. Check beforehand whether the new subsidy rules are better for you across all contracts, including for children and for years with changing income.
What about the child subsidy?
For existing contracts it is 185 euros per child for births up to the end of 2007 and 300 euros for births from 2008. In the new system it is up to 300 euros per child.
Can I change my provider after the reform?
Yes. A transfer to another retirement provision contract is not a harmful use. Costs and deadlines for the transfer are in the guide on switching Riester.
What to do now
- Ask your provider for a current overview of balance, costs, subsidies and guarantee.
- Decide whether you want to continue contributions, pause them or switch to the new rules, and note the consequences for all your contracts.
- Do not cancel before you know the repayment consequences under section 93 EStG. You can get a personal assessment from Academycon.
- Decide on a switch only once you know the costs of the new product in comparison.
Related guides
- Altersvorsorge 2027: Der Überblick zu Depot, Frühstart-Rente und Riester (in German)
- Riester-Reform 2027: Was sich für Studierende und Berufsstarter ändert (in German)
- Riester wechseln: Was der Umstieg ins Altersvorsorgedepot kostet (in German)
- Altersvorsorgedepot jetzt abschließen oder bis 2027 warten? (in German)
Sources: Bundestag, paper 21/4996, committee recommendation of 25 March 2026; Deutsche Rentenversicherung, Altersvorsorgereformgesetz, as of 17 September 2026; section 93 EStG, harmful use; AltZertG, consolidated version from 1 January 2027, as of November 2026; section 84 EStG.
Last updated: November 2026. This guide is general information, not individual advice.
