Altersvorsorgedepot for low earners: worse than Riester?

Tilman Freyenhagen

Published on 29 July 2026 · Updated on 7 August 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

The short answer: is the Altersvorsorgedepot worse for low earners?

No, the new Altersvorsorgedepot isn't across-the-board worse for low earners, but the outcome varies a great deal depending on personal circumstances. In specific constellations — for instance very low income combined with several children — the old Riester system, with its fixed amounts, offered nominally higher allowance rates for a small own contribution. Which system works out better for you depends heavily on the interplay between your own contribution, the number of children, and the long-term return on the capital market.

Fixed Riester allowances compared with contribution-proportional subsidy

The key differentiating factor lies in the subsidy logic: the classic Riester system guaranteed a fixed Grundzulage of 175 euros, plus up to 300 euros per child, from a minimum own contribution of just 60 euros a year. In extreme worked examples, 775 euros of Riester allowances for a minimal own contribution thus stood against just 300 euros of direct subsidy in the new system^[1]. The Altersvorsorgedepot, by contrast, relies on contribution-proportional subsidy, where the state supports every euro paid in at a fixed percentage rate and additionally grants child allowances and a one-off career-starter bonus; for low earners the subsidy rate remains high as a result.

• Riester system: fixed baseline allowances favoured very small own contributions for households with many children, but held back the final capital through the high administrative costs and low equity ratios that came with the guarantee.
• Altersvorsorgedepot: the state subsidy grows with every euro saved. Because guarantee costs fall away, contributions flow directly into return-focused ETF portfolios, which can offset the subsidy gap over longer terms.
• Grandfathering: existing Riester contracts remain fully valid. You don't need to hastily cancel an existing contract; instead, you can weigh up in a targeted way whether switching or suspending contributions is worthwhile for you.

A direct Riester comparison therefore requires a holistic view across the entire accumulation phase. While Riester offered nominal guarantees, the Altersvorsorgedepot, through its full capital-market orientation, enables higher real return potential for your pension. Note: all worked examples are illustrative model calculations. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

The old Riester subsidy: why low earners and families benefited strongly

The previous Riester system was characterised by a fixed allowance structure that specifically supported households with low income and several children. Employees subject to mandatory pension insurance received an annual Grundzulage of 175 euros, plus an additional 300 euros for each child eligible for Kindergeld (born from 2008 onward). To secure the full subsidy, a minimum own contribution of 4 percent of the previous year's gross income, minus the allowances, had to be paid. For small incomes, an absolute Sockelbeitrag of just 60 euros a year also applied. Our Riester comparison shows that this fixed-amount logic led to nominally very high subsidy rates at low salaries.

The core elements of the classic Riester allowances

• Grundzulage of 175 euros: a fixed state contribution per year for every eligible saver.
• Kinderzulage of 300 euros: an annual premium for each child born from 2008 onward, paid directly into the contract.
• Sockelbeitrag of 60 euros: the minimum annual amount with which low earners without a high income could activate the full allowance.
• High relative subsidy rate: at small incomes, the state contribution often exceeded the saver's own contribution many times over.

In individual cases, families with low earnings thus achieved subsidy rates of over 60 to 80 percent of the total contribution. Even so, a high nominal subsidy rate didn't automatically mean efficient wealth-building: the high administrative costs of traditional Riester contracts, and the statutory 100 percent contribution guarantee, often noticeably held back capital-market performance in practice. Note: all model calculations are for illustration. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG. For low earners in particular, it's therefore worth taking a close look at the actual net return.

The new Altersvorsorgedepot: how contribution-proportional subsidy works

For some low-earner constellations, the direct state allowance under the new Altersvorsorgedepot is nominally lower than under the classic Riester-Rente. In particular, people with very low income or several children previously benefited from fixed allowance amounts for minimal own effort. The Altersvorsorgedepot, which takes effect from 2027, replaces this system with a simple, contribution-proportional subsidy that directly rewards your own contributions. We take a detailed look at how this new subsidy logic works.

The basic rules of the new allowance structure

• 50 percent Grundzulage: for the first 360 euros of own contribution in the year, the state pays 50 cents per euro paid in as a direct allowance (maximum 180 euros).
• 25 percent additional subsidy: on further own contributions up to the upper limit of 1,800 euros a year, the state grants an allowance of 25 percent (maximum 360 euros).
• Minimum own contribution: to receive the full percentage-based subsidy, a statutory minimum own contribution of 120 euros a year applies.
• No more rigid income thresholds: the complex link to a percentage of the previous year's income falls away, simplifying your contribution planning.

This mechanism rewards continuous saving from small amounts of just 10 euros a month. Even though low-income families may achieve nominally smaller direct allowances than under the old Riester system, doing away with costly contribution guarantees and investing directly in the capital market offsets this difference over the long term Riester comparison. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Direct calculation comparison: Riester vs. Altersvorsorgedepot for small incomes

The systematic shift from the rigid Riester allowance system to the Altersvorsorgedepot's percentage-based matching model plays out differently depending on household structure. While the classic Riester-Rente paid out high fixed allowances for a very small own contribution and several children, the new system rewards your actual own effort with a clear matching rate of up to 50 cents per euro paid in^[3]. This mechanic is particularly relevant for families with children and single parents.

The comparison shows that, in purely arithmetical terms, low earners with many children achieved a higher nominal subsidy rate on their own contribution under the old Riester system. However, a pure allowance comparison falls short: the obligation to guarantee contributions forced Riester providers into expensive, low-yield reserve-fund models. The new Altersvorsorgedepot, by contrast, allows unrestricted investment in global equity ETFs, whose return potential can offset the nominal allowance gap over longer terms.

Comprehensive grandfathering also applies to existing Riester contracts. Anyone benefiting from particularly high existing allowances doesn't necessarily need to switch, and can instead let existing contracts lie dormant or continue them. Which route delivers the highest final capital in an individual case can be worked out precisely using our subsidy calculator. Note: all model calculations are for illustration. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

The return factor: why greater ETF upside can offset missing allowances

Doing away with a rigid contribution guarantee allows the new Altersvorsorgedepot an unrestricted equity ratio of up to 100 percent in broadly diversified ETFs. This means investors, despite nominally smaller direct state allowances, can build up a higher final capital over long accumulation phases than with a classic Riester-Rente. It's true that, for low earners with several children, the old Riester system offered an extremely high immediate subsidy rate through fixed allowance amounts, but the statutory guarantee obligation forced providers to shift large shares of capital into low-yield interest-bearing securities.

When costly hedging mechanisms and guarantee costs fall away, the entire savings rate flows continuously into return-focused real assets. Over two to three decades, this compounding effect can, on paper, outweigh the loss of higher old-system allowances. While classic Riester contracts, because of the obligation to preserve the capital paid in, often achieved only low real returns after inflation, the Altersvorsorgedepot participates directly in global economic growth. Anyone considering giving up the familiar Riester guarantee therefore needs to objectively weigh up the interplay of remaining term, personal risk tolerance, and market-driven return expectations.

For savers with low income, the transition from the old to the new system therefore represents a fundamental fork in the road: away from purely allowance-driven interest products, towards independent wealth-building on the capital market. Since existing contracts are legally protected and don't necessarily have to be dissolved, the decision should always be made based on the specific individual case. Note: not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Offsetting against Grundsicherung and protection from seizure: what applies to low earners?

For savers on a narrow income, every form of private provision raises the critical question of what happens to the savings if Grundsicherung (basic state income support) has to be claimed in retirement, or if seizure threatens during their working life. When switching from the previous Riester system to the Altersvorsorgedepot, clear statutory protections continue to apply for low earners, safeguarding the capital built up both during the accumulation phase and during the pension phase.

Protection of the balance and the allowance under § 82 SGB XII

During the accumulation phase, the state-subsidised Altersvorsorgedepot enjoys complete protection from seizure, just like the Riester-Rente, as long as the contributions stay within the subsidised framework. Creditors have no access to the subsidised retirement assets^[5]. If, in retirement, the statutory pension turns out to be insufficient and Grundsicherung im Alter (basic income support in old age) has to be claimed under the SGB XII (German Social Code Book XII), a monthly income allowance for subsidised private pensions applies.

• Accumulation phase: the subsidised balance is legally protected from seizure and from being offset against any interim receipt of Bürgergeld (basic unemployment benefit).
• Allowance under Grundsicherung: payouts from subsidised contracts are fully disregarded up to a baseline amount of 100 euros a month.
• Upper limit of the allowance: for payouts above that, 30 percent remains disregarded. The maximum allowance is 50 percent of Regelbedarfsstufe 1 (currently 281.50 euros a month).
• System change: the legal status regarding protection from seizure and the Grundsicherung allowance is fully retained under the Altersvorsorgedepot.

Even where the pure allowance amount was nominally higher under Riester in individual family constellations, the allowance of currently up to 281.50 euros a month effectively protects the supplementary pension in old age from being seized by the welfare office. Combined with the higher return potential of guarantee-free capital-market investment, the net benefit for low-income households therefore stays stable over the long term. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Grandfathering and the switching decision: should existing Riester contracts stay in place?

Existing Riester contracts enjoy complete grandfathering under the reform. That means: anyone who wants to continue their contract unchanged keeps all the allowances received so far, as well as the promised contribution guarantee. Especially for low earners with several children, who benefited strongly from fixed Kinderzulagen under the old system, a hasty cancellation or an unchecked transfer is often financially disadvantageous. Every decision should therefore be weighed up carefully beforehand, to determine whether continuing the contract, suspending contributions, or transferring is the most economically sensible step.

• Continuing the contract unchanged: advisable for contracts with high guaranteed interest rates, or where the old allowance structure guarantees an above-average subsidy rate.
• Suspending contributions: sensible if the existing contract is being weighed down by high administrative costs. You secure the capital built up so far, along with the contribution guarantee, and invest new savings contributions in the Altersvorsorgedepot from 2027. Deliberately letting the Riester contract lie dormant prevents further annuitisation on unfavourable terms.
• Transferring capital into the Altersvorsorgedepot: mainly worth considering with a longer remaining term until retirement. The higher return potential of a broad capital-market investment without guarantee costs can offset initial allowance differences over the years.

One should be explicitly warned against independently cancelling an existing contract: on a non-qualifying use, Riester allowances and tax benefits already received lapse and must be repaid to the tax authorities. A switch to the Altersvorsorgedepot must therefore be made exclusively through the transfer routes designated for this purpose, which are free of any non-qualifying-use penalty.

Which option delivers the highest return for your personal situation can only be determined through an individual comparison. Note: all model calculations and comparisons are purely for orientation and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Recommendation: the right path for your personal pension strategy

Whether switching from an existing Riester contract into the new Altersvorsorgedepot is worthwhile depends on your individual circumstances. While families with several children on very low income often received high fixed allowances under the old system, the new system offsets this nominal advantage in many cases through higher return potential on the capital market without costly guarantee costs^[6]. We therefore recommend against any hasty cancellations, since existing contracts enjoy legal grandfathering and existing allowances are retained.

Two equally valid paths to the optimal pension decision

• Independent calculation: if you like to manage your finances yourself, you can use our subsidy calculator to work out the exact subsidy rate for your income bracket, and analyse the right options in the provider comparison.
• Personal professional advice: if you're uncertain about your existing Riester contract, or want an individual assessment, our independent advice service arranges direct contact with qualified experts for personal advice.

For all calculations and model calculations, the following applies: these are illustrative worked examples and not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG. For further context on the reform for low earners, our knowledge section is available to you.