Federal government introduces law for “early start pension” in the Bundestag

Ten euros per month from the state for children and young people between the ages of six and 18: Federal Finance Minister Lars Klingbeil (SPD) has introduced his law for the so-called early start pension to the Bundestag. He spoke of a “sign of better justice.”

The federal government estimates the costs of the funding to be 198 million euros for 2027. By 2030, the costs are expected to rise to 411 million euros.

The concept of building wealth with state help also received fundamental support from parts of the opposition - albeit with criticism of the design. From the AfD's perspective, the planned subsidies for the "early start pension" are not enough to build up enough capital for old age. The party demanded a monthly deposit of 100 euros instead of 10, starting from birth - but only for "German children with actual permanent residence in Germany," as AfD MP Iris Nieland said.

The Green MP Stefan Schmidt criticized the fact that only children born from 2020 should receive state funding: "Completely excluding older age groups from the 'early start pension', contrary to your promises, is simply unfair," criticized Schmidt.

The “early start pension” is intended as starting capital for retirement provision. The state subsidy should begin with those born in 2020 - retroactively to January 1, 2026. From 2027 onwards, the six-year-olds will be added annually. Parents or grandparents should be able to top up the deposit through voluntary payments.

Once you reach the age of majority, you can continue to save the deposit independently. The subsidized capital is generally only paid out once you reach the age of 65.

“It is still the case today that parents’ wallets far too often decide what future children have in our country,” said Klingbeil. "We're breaking that down to some extent with the 'early start pension'." At the same time, they want to strengthen financial education so that young people get to grips with capital markets at an early age. Klingbeil announced that the government will present a financial education strategy in the second half of the year.

The Vice Chancellor calculated that the state funding alone could result in a contribution of 53,000 euros through the effects of interest and compound interest until retirement. If parents or grandparents added 20 euros every month, "then according to our estimates it will be a sum of 160,000 euros by the time you retire." The AfD, however, doubted that enough money would be raised.

The deputy Union faction leader Matthias Middelberg spoke of a milestone. Only around 14 million Germans still invested in stocks. In Scandinavian countries, the proportion of shareholders is significantly higher, with corresponding advantages for retirement provision, said the CDU politician.

After today's initial consultation, the Bundestag is expected to finally discuss the project in the fall so that it can come into force at the beginning of next year.