Early start pension: 10 euros a month should become a pension of 50,000 euros

All children born in 2020 are eligible, provided they have a tax identification number and are resident in Germany. From the age of six to 18, you receive ten euros per month from the state. Requirement: The money must be invested on the capital market.

Parents have a choice. You can conclude a certified standard contract for your child with a private provider. The state then transfers the 10 euros monthly directly to the depot. In addition, parents or grandparents are allowed to deposit up to 6,840 euros per year.

If they don't, the federal government invests the ten euros a month in a special fund called "early start pension," which is managed by the Deutsche Bundesbank. The funds then flow exclusively into broadly diversified global stocks or equity funds. The claim to the start-up capital saved from the collective investment can be claimed up to the age of 35. The balance, including any income or losses achieved up to that point, will then be transferred to an individual retirement plan contract. Funds that are not claimed flow back into the federal budget.

Over 12 years, the funding per child amounts to 1,440 euros. According to the Ministry of Finance, an average return by the time you retire could amount to over 50,000 euros - not taking inflation and later taxation into account.

The federal government expects funding expenditure of 198 million euros for 2027. Since another birth cohort is added every year, they are expected to rise to 411 million euros by 2030. There are also administration costs. Overall, the Bundestag Budget Committee calculates expenditure of around 1.2 billion euros for the years 2027 to 2030.