Germany's Early Start Pension (Frühstartrente): What Parents Need to Know

From their sixth birthday, the German state pays every child living in Germany €10 a month towards retirement, for twelve years. This includes the children of expats. The money only goes into an account in your child's name if you open one yourself, though. This guide explains who gets the Frühstartrente, which account you need, the deadline you should keep in mind and what happens to the money when your child turns 18.

The key points

• Amount: €10 a month, which is €120 a year and at most €1,440 over twelve years.
• Start: The first cohort is children born in 2020, backdated to January 2026. From 2027, each year's six-year-olds join.
• Account: The money goes into a standard pension depot contract in your child's name. You open it as a parent, online, and no advice is required.
• No account: The state invests the money collectively in equities. Your child can claim it as starting capital until their 35th birthday.
• Lock-in: The state money stays in the contract until retirement and is generally paid out from age 65.

Where the law stands

The Bundestag passed the Frühstartrente act on 16 October 2026, in the version the Finance Committee had amended two days earlier (Bundestag announcement, in German). The act needs the consent of the Bundesrat, the chamber of the German states, which is still pending. It is planned to take effect on 1 January 2027. Payments for children born in 2020 will then be made retroactively for 2026.

This guide reflects the situation on 16 October 2026. I will update it once the Bundesrat has decided and the first providers offer contracts.

Which children qualify

Every child between their 6th and 18th birthday qualifies if their main residence (erster Wohnsitz) is registered in Germany and they have a German tax identification number (Steuer-ID). Children receive the Steuer-ID by post automatically after birth or after you register your address in Germany. Nationality does not matter, so children of expats and international professionals are included. Payments are made for full months: from the month of the 6th birthday to the month before the 18th birthday, exactly 144 months.

When a child joins depends on the year of birth:

• Born in 2020: support from 2026, paid retroactively once the law applies.
• Born in 2021: support from 2027.
• Born in 2022 or later: support from the year your child turns six.
• Born in 2019 or earlier: no state money. You can still open a Frühstartrente contract and pay into it yourself.

The cut-off is hard on families with several children: a child born in 2020 gets the full €1,440, an older sibling born a year earlier gets nothing.

How the money reaches the account

The Frühstartrente is not paid into a current account. It goes into a pension contract in your child's name. Only one type of contract qualifies: the standard depot contract (Standarddepot-Vertrag Altersvorsorge) under § 1 (1c) of the German Pension Contracts Certification Act, the simple standard product of the new Pension Depot (Altersvorsorgedepot). Banks, fund companies and insurers can offer it once their contract is certified.

Stricter cost rules apply than for normal pension contracts. On the part that consists of state money and its returns, the provider may not charge acquisition or distribution costs until payout begins. If you switch providers later, neither the old nor the new provider may charge for the transfer. Running costs of the standard depot are capped by law at 1% a year. You can sign up entirely online, and no advice is required by law.

You open the contract as a parent on behalf of your child. From the age of seven, your child can sign it too, but only with your consent. When you open the account, the provider applies for the Frühstartrente automatically at the Central Allowance Office (Zentrale Zulagenstelle) of the Deutsche Rentenversicherung Bund, unless you object beforehand. The provider needs your child's Steuer-ID for this. The money then arrives quarterly, each time covering the past months.

Only one contract per child is supported. If both parents open an account separately, only the first one gets the money and the second application is rejected. Agree on who does it, especially if you live apart.

No account? The state invests the money

If you do not open a contract, the money is not lost straight away. The federal government invests €10 a month for every child without their own contract collectively on the capital market. For this, it sets up the special fund "Frühstartrente" on 1 January 2028, managed by the Deutsche Bundesbank. The Finance Committee wrote into the law that this money may only be invested in broadly diversified global equities or equity funds. The state does not guarantee any particular return and does not make up for losses.

If you open a contract later, or your child does so after turning 18, their share of the collective fund including returns is transferred to the contract as starting capital. This is possible until the 35th birthday. After 18, any certified pension contract qualifies, not only the standard depot. Whatever has not been claimed by the end of the year in which the cohort turns 35 goes back to the federal budget. Those affected are supposed to be informed once more before that happens.

The deadline to keep in mind

What counts is when the provider's notification reaches the Central Allowance Office. If it arrives no later than the calendar year in which your child turns seven, the contract receives the Frühstartrente backdated to the 6th birthday. If it arrives later, it counts as a late contract. There is then no back payment for past months. Instead, the contract receives the starting capital from the collective fund and then the regular payments from the next quarter.

Providers report new contracts in batches by the end of the month following each quarter. A contract you open in December is therefore reported at the end of January and lands in the following year. To be on the safe side, open the contract by the end of September of the year your child turns seven. For children born in 2020, that means by the end of September 2027. Because providers still have to build their systems in 2027, they may exceptionally submit notifications from the first three quarters of 2027 until 31 December 2027.

Missing the deadline is not a disaster. The money in the collective fund is also invested in equities and is not lost. You just have less say in how it is invested in the early years.

Paying in yourself: what it does and does not do

Parents, grandparents or godparents may pay up to €6,840 a year into the contract on top. There is no allowance and no tax deduction for this, neither for you nor for the grandparents. The advantage lies elsewhere: returns inside the contract are not taxed until payout. At payout in retirement, after a long contract term usually only half of the gain on your own contributions is taxable. The part that comes from the Frühstartrente itself is fully taxed at payout.

Unlike the state money, your own contributions are not locked until retirement. Depending on the contract terms, they can be withdrawn. If you stop paying in, only that part is paused and the Frühstartrente keeps coming. If you start paying again, the pause ends automatically and free of charge.

Before paying in larger amounts, look at the alternatives. A junior depot or a child pension plan with a unit-linked pension insurance gives you and your child more freedom over what the money is used for later, such as training, a driving licence or a first flat. The Frühstartrente is purely for retirement. For most families it makes sense to take the €10 and split their own savings deliberately.

What €10 a month can grow into

An example assuming a 5% annual return after costs: the state's €1,440 grow to around €1,950 by the 18th birthday. If the money stays in the depot until 65 without further payments, it grows to around €19,400. That is before tax and without inflation. In today's purchasing power, at 2% inflation a year, it is roughly €6,900.

If the family adds €25 a month for the same twelve years, €3,600 in total, the depot holds around €67,700 at 65 under the same assumptions, roughly €24,200 in today's money. Stock markets go up and down, and the actual return can be much lower or higher. The calculation mainly shows how much the long term matters. You can try your own assumptions with the compound interest calculator.

At 18: keep saving or transfer

State payments end at the 18th birthday. The contract itself continues and becomes a normal Pension Depot. If your child is then eligible for subsidies, for example as an apprentice or employee paying into the statutory pension, they receive the Pension Depot basic allowance of up to €540 a year on their own contributions, plus a one-off €200 career starter bonus before their 25th birthday. No new contract is needed.

Alternatively, your child can transfer the Frühstartrente assets in full to another certified pension contract, including one with a guarantee. Partial transfers are not possible. The lock-in stays the same: the state money and its returns are generally paid out only from 65, as a lifelong annuity or as a payout plan until at least 85. They cannot be pledged, sold or seized.

Moving abroad and other special cases

• Leaving Germany: Payments end with the month in which your child gives up their main residence in Germany. The money saved up to then stays in the contract and is not reclaimed.
• Death before the 18th birthday: The assets in the contract can be inherited, including the state share. The law does not require a repayment to the state in this case.
• No Steuer-ID: Without a tax ID there is no Frühstartrente. If it is issued later, it applies backwards to the months in which the other conditions were met.

If you are planning to leave Germany for good, my guide on relocating to and from Germany covers what to do with your other contracts.

Where I can help as an insurance broker

You do not need me for the Frühstartrente contract itself. It is deliberately simple, works online, and no acquisition costs may be charged on the state money. Choosing a depot and funds for it is an investment decision, and as an insurance broker licensed under § 34d GewO I do not advise on that.

You can do more in your own contract. If you as a parent have a Pension Depot and receive child benefit (Kindergeld), you get up to €300 child allowance per child and year there. That is more than twice the Frühstartrente. Whether a contract of your own suits you, whether an old Riester plan should continue or be transferred and how to combine saving for your children with protection such as a disability insurance option, we can go through together, in English or German. For the Riester question, read Cancel, keep or transfer your Riester plan?