Does the new subsidy system apply to my old Riester contract?

Tilman Freyenhagen

Published on 25 July 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

The grandfathering principle: why your old Riester contract does not switch automatically

Every Riester contract concluded before 1 January 2027 is fully grandfathered by law. Your existing contract therefore stays automatically on the previous subsidy system and does not switch on its own, even if you open an additional new Altersvorsorgedepot from 2027. The new subsidy system only applies to old contracts once you submit an explicit switch declaration to your provider.

Legal basis and options for existing savers

In the reform law, the legislature set out clear rules to protect the trust of millions of savers. Anyone who signed their contract before the cut-off date keeps their agreed terms, guarantee provisions and subsidy structure unchanged. In our day-to-day advisory practice, we see frequent uncertainty about whether opening a new contract automatically pulls old contracts along with it. We can put that concern to rest: there is no automatic transfer of old contracts into the new subsidy rules.

• Unchanged continuation: your old contract keeps running under the existing subsidy system, with the previous allowances and minimum-contribution rules.
• Optional system switch: you can switch to the new subsidy system alone by written declaration, while the contract product itself stays unchanged.
• Subsidised provider switch: transferring your capital to a new Altersvorsorgedepot is possible, but is a separate step that may involve switching fees.

Savers therefore have full freedom of choice and can take their time to work out which combination of old contract and new account fits their personal plans. If you let your old contract lie dormant, the state allowances you have already earned remain fully intact and are not lost.

How the legal systems sit side by side: old contracts and new products

The Zentrale Zulagenstelle für Altersvermögen (ZfA, Germany's central pension allowance office) records and administers every subsidised retirement contract strictly at the level of the individual contract. If you took out a Riester contract before 1 January 2027, it enjoys comprehensive grandfathering. That means your old contract remains legally independent under the previous subsidy system for as long as you do not explicitly declare a switch to the new one. Opening a new subsidised product, such as the Altersvorsorgedepot available from 2027, never triggers an automatic switch or merger of your existing contract. What happens to your contract stays entirely in your hands.

Documentation at contract level and the role of the ZfA

The ZfA keeps an individual allocation account for every person entitled to state-subsidised pension savings, on which contracts are recorded separately by subsidy system. Every contract receives a unique certification marker. This fixes, in a legally binding way, which calculation rules for the minimum own contribution, the Grundzulage (the basic state allowance) and the Kinderzulage (the child allowance) apply to which product. The two systems therefore exist completely independently of each other within your portfolio.

• Old contracts: subject to the previous income-linked rule for the minimum own contribution, and to the previous allowance rates and contribution guarantees.
• New contracts: receive the new subsidy rates with no contribution-guarantee requirement, and are administered on the simplified assessment basis.
• Preserving grandfathered status: contributions to your old contract continue to trigger the familiar subsidy, even if you are paying into a subsidised Altersvorsorgedepot at the same time.

This clear legal separation prevents unintended system switches. For you, that means maximum flexibility: you can keep paying into your existing contract unchanged, or let it lie dormant, while at the same time benefiting from the return potential of the new product world. We recommend weighing both subsidy structures carefully against each other before making a decision.

The dual-contract scenario: which subsidy system applies if you open a new account?

If you open a new subsidised Altersvorsorgedepot from 2027 while keeping your existing Riester contract running, two different subsidy worlds exist side by side. Thanks to statutory grandfathering, your old contract automatically stays under the previous subsidy system for as long as you do not submit an explicit switch declaration. The newly opened account, by contrast, is subject to the new subsidy logic from day one, with income-independent matching and changed allowance rates.

Splitting own contributions and the maximum limits

Paying into two contracts in parallel requires careful coordination of your own contributions. Under the old system, the minimum own contribution for the full allowance is based on 4 percent of the previous year's income subject to statutory pension insurance (up to a maximum of 2,100 euros, less allowances)^[1]. Under the new subsidy system from 2027, a simplified base contribution applies, together with a percentage match on your own savings contributions. If you pay into both contracts, you need to observe the statutory limits for the Sonderausgabenabzug (deduction as a special expense). To avoid over-subsidisation or incomplete allowances, you can also let your old contract lie dormant and concentrate the full state contribution in the new account.

• Legal separation: opening a new Altersvorsorgedepot does not automatically switch your existing Riester contract onto the new system.
• System switch: if you declare a switch to the new subsidy system for an old contract, the new rules apply specifically to future contributions.
• Efficient contribution splitting: splitting your own contributions across two contracts requires precise coordination to avoid subsidy gaps.

The choice between paying into both contracts in parallel, letting the old contract lie dormant, or transferring it in full depends on your individual contract terms and remaining guarantees. We recommend a precise financial-mathematical review of the overall effect. (Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

Voluntary system switch: how to move your old contract onto the new subsidy system

If you want to keep your existing Riester contract running while also benefiting from the new state subsidy rules from 2027, you do not necessarily have to terminate the contract or move your savings. The legislature allows an existing old contract to be moved into the new subsidy system alone, while keeping its previous terms unchanged. In other words: the product structure and contractual terms stay in place, while the new state contributions and rules apply to future contributions.

Step by step: how to declare the switch to your provider

1. Review your contract data: we recommend first analysing your old contract's existing terms and guarantees closely, together with the impact of the new subsidy logic.
2. Submit the declaration: you tell your provider that you want to switch your existing contract to the new subsidy system.
3. Confirmation and adjustment: the provider switches the contribution and accounting logic for future payments onto the new subsidy system and confirms the contract adjustment to you.
4. Adjust your own contributions: after the switch, you pay your contributions according to the requirements of the new subsidy system, to secure the full state subsidy.

A key advantage of this option is that it preserves what you already have: the contribution guarantee originally agreed for your old contract stays fully intact when you switch only the subsidy system. Any Riester allowances you have already received, and your accumulated balance, also remain unchanged in the contract. This route particularly suits savers who value the familiar security level of their old contract but want to benefit from the changed subsidy rates or the simplified own-contribution rules.

Transferring capital into an Altersvorsorgedepot: a full switch including your balance

Anyone who does not want to leave the capital saved in an existing Riester contract where it is can, once the reform takes effect, arrange a full capital transfer into a new Altersvorsorgedepot. Such a transfer is tax-neutral, so all allowances and tax benefits granted in the past are retained in full. Your existing retirement savings move directly into the chosen target contract and form the foundation there for future return-oriented capital investment. One key special rule applies here: capital already subsidised in earlier years cannot be subsidised again in the year of the transfer.

Statutory rules on switching fees and deadlines

To keep the switch fair and predictable for savers, strictly regulated legal conditions apply. The legislature caps the switching costs incurred on a switch, so that no excessive cancellation fees can erode your accumulated savings. The regulations also set clear deadlines for processing. Bear in mind, though, that the administrative transfer process between your previous institution and the new account provider does take some processing time.

• Tax-free transfer: the switch takes place with no deductions harmful to the subsidy, so keeping your allowances is legally guaranteed.
• No double subsidy: transferred capital and old allowances do not count as new eligible own contributions in the year of the switch.
• Cost ceiling: statutory fee caps protect your savings from disproportionate switching charges levied by your old provider.
• Formal processing: the application must be submitted correctly through the new provider, to meet deadlines and legal requirements.

Cancelling your old contract on your own initiative carries significant risk. If a Riester contract is cancelled manually instead of being transferred through the statutory capital-transfer route, this counts as detrimental use: in that case, the tax office claws back every allowance and tax relief you have received to date. A seamless switch through the certified transfer route reliably protects you from this loss.

Effects on the minimum own contribution and allowances: the numbers compared

The private pension reform replaces the previous, complex calculation logic of the Riester-Rente with a transparent matching model. Whereas the individual minimum own contribution under the old Riester system was strictly tied to the previous year's gross income, the new subsidy system uses a flat minimum contribution. This considerably simplifies contribution planning for savers, since income fluctuations no longer require an automatic contribution adjustment.

In the classic Riester system, the standard minimum own contribution for the full basic allowance is directly tied to income, which creates a need for adjustment whenever pay changes. Under the new system, even a flexible, low own contribution already produces a direct percentage subsidy. So in the new model, state support grows directly with every euro paid in, without being tied to a rigid income threshold.

For existing Riester contracts, the old subsidy system remains fully in place unless you explicitly switch. However, anyone who opens a new subsidised account from 2027 automatically uses the new percentage-based logic for that contract. We recommend a precise comparison of your individual subsidy rate before making a transfer decision. Note: the example calculations given are for illustration only and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Suspending contributions as an alternative: letting the old Riester lie dormant and starting fresh

If you want to benefit from the opportunities of the new subsidy system from 2027, you do not necessarily have to terminate or transfer your existing Riester contract. Under the statutory rules of the Bundesministerium der Finanzen (Federal Ministry of Finance, BMF), you have a right to suspend contributions. With this option, the balance you have built up so far stays in your old contract and continues to accrue interest under its existing terms. All state allowances and tax benefits granted in the past remain fully intact, since there is no detrimental cancellation involved.

Mechanics and interactions of suspending contributions

By suspending contributions, you decouple your existing pension savings from future payments. From 2027, you redirect your new savings instalments into a newly opened Altersvorsorgedepot, to which the new subsidy logic then applies. Note the strict separation between the systems here: state support is not granted twice, but is assessed solely on the own contributions flowing into the actively funded product. If you let the old Riester contract lie dormant, it remains under its original set of rules.

• Preserving your guarantee: the contribution guarantee promised in your old contract remains in full for the existing capital.
• Capturing return potential: you invest new contributions flexibly, with no contribution-guarantee requirements, in the new account.
• Check the cost structure: the ongoing fixed costs of a dormant old contract can erode the existing balance over the years.
• Consider the administrative burden: you will be running two contracts with different provider structures in parallel going forward.

This strategy offers a balanced solution for savers who want to protect their accumulated capital while also using modern capital-market opportunities for new contributions. We recommend checking the effective cost burden of your dormant Riester contract carefully before making this decision. Note: all illustrations are for guidance only and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Decision matrix for Riester savers: which path fits your life plans?

The choice between staying in the existing Riester system, suspending contributions, or switching to the new Altersvorsorgedepot depends largely on your personal circumstances and financial goals. Holders of existing contracts benefit from statutory grandfathering, so contracts can simply continue as before. Any adjustment, however, requires a systematic weighing of the remaining term, expected returns, contribution guarantees and the effective administrative costs of your old contract. You decide on the optimal strategy based on your personal preferences regarding security, flexibility and capital-market orientation.

For concrete implementation planning ahead of the 2027 reform launch, a milestone-based approach is advisable. As a first step, review your current contract documents for the annual statement, the effective cost ratio and the guaranteed minimum benefit. If you are considering a switch to the Altersvorsorgedepot or taking out an additional new contract, you should compare the cost structures and any transfer fees closely. In particular, the effect of your age largely determines whether the remaining savings period is enough to offset any switching costs through higher market returns.

Finally, it is worth weighing up which channel you want to use to act on your decision. Self-directed investors who make their own investment decisions will in future be able to manage the Altersvorsorgedepot directly through digital platforms. If, however, you are unsure about how the subsidy is credited, how allowances are split within a family, or whether you should let your Riester contract lie dormant, independent professional advice offers reliable guidance. A hasty cancellation triggers the clawback of state allowances already received and should be avoided at all costs.