Can I keep paying into my Riester contract after 2027?

Tilman Freyenhagen

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

Grandfathering from 2027: the legal basis for existing contracts

When the reform of subsidised private pension provision takes effect on 1 January 2027, all existing Riester contracts are covered by indefinite statutory grandfathering under § 5 of the Altersvorsorge-Zertifizierungsgesetz (AltZertG, the pension certification act). If you took out your contract before 1 January 2027, you don't need to make any hasty decisions or cancel your contract prematurely. For Riester contracts taken out before 1 January 2027, lawmakers guarantee unrestricted grandfathering^[1], so they can be legally continued and paid into as before.

The key elements of statutory grandfathering

• Indefinite continued contributions: you can carry on paying your usual monthly or annual contributions into any contract taken out before 2027, exactly as before.
• The subsidy system stays the same: the existing state allowance made up of the basic allowance (175 euros a year) and child allowances (185 euros for children born by the end of 2007; 300 euros for children born from 2008) remains unchanged.
• Contract guarantees continue: the contribution guarantee agreed with your provider retains its full validity.
• Statutory stop on new business: from 1 January 2027, banks and insurers are no longer allowed to offer new Riester contracts under the old model.

Alongside the direct allowances, the special-expense tax deduction for existing contracts under § 10a EStG also continues as before. Where the tax office's more-favourable-terms check shows a greater benefit than the pure allowance, that difference continues to be credited through your income tax return.

For existing Riester savers, this removes any pressure to act on impulse. You retain full flexibility and control over your retirement provision. You can take your time to check whether you want to keep your Riester-Rente and continue paying in unchanged, or whether switching makes sense for your personal circumstances. We set out exactly what happens to your Riester-Vertrag transparently and based on the facts in the knowledge section.

The subsidy system for existing savers: basic allowance and child allowances

For savers who took out their contract before 1 January 2027, comprehensive statutory grandfathering applies. If you want to keep your contract going, you don't need to make any changes: you can carry on paying into your existing Riester-Vertrag unchanged from 2027 too. The existing subsidy system is fully preserved for you, while providers are no longer allowed to sell new Riester contracts from the cut-off date. This means you lose neither your allowance entitlement nor the tax framework, as long as the contract keeps being paid into.

Allowance structure and the minimum own contribution

The mechanics of the state subsidy still rest on the interplay of own contributions, direct allowances, and a possible special-expense tax deduction. To secure the full allowances, those eligible have to pay the so-called minimum own contribution each year. This is calculated as exactly 4 percent of the previous year's gross income subject to statutory pension insurance, minus the allowances the saver is entitled to. The maximum subsidised total is 2,100 euros per calendar year^[3]; the floor is a base contribution of 60 euros a year^[4].

• Basic allowance: every directly or indirectly eligible person receives an annual basic allowance of 175 euros credited to their contract.
• Child allowance for older children: for every child born before 1 January 2008 for whom child benefit is payable, the allowance is 185 euros a year.
• Child allowance for younger children: for children born after 31 December 2007, the state grants an increased child allowance of 300 euros a year.
• The more-favourable-terms check via your tax return: alongside the allowances, you can claim your contributions as a special-expense deduction under § 10a EStG. The tax office automatically checks whether the tax benefit exceeds your allowance entitlement.

If the full minimum own contribution isn't paid in a given year, the Zentrale Zulagenstelle für Altersvermögen (ZfA, the central pension allowance office) reduces the state allowances proportionally. For families with several children, it's especially worth checking the calculation carefully, since the allowances can cover a large share of the required total contribution. The figures shown are general information and do not constitute investment advice under § 1 Abs. 1a Nr. 1a KWG.

Tax treatment under the existing model: the special-expense deduction and the more-favourable-terms check

For continuing to pay into existing Riester contracts after 1 January 2027, lawmakers provide for the unrestricted continuation of the established tax privilege. If you keep your contract running, you can continue to claim your own contributions, together with the state allowances, as special expenses in your income tax return, up to an annual maximum of 2,100 euros^[6]. This continues to apply unchanged, provided the relevant subsidy conditions are met.

As part of the annual assessment, the tax office automatically runs a more-favourable-terms check. It compares the actual tax saving from the special-expense deduction against the sum of the allowances you're entitled to. If the tax reduction is greater than the pure allowance entitlement, you receive the difference as a tax refund. If the allowance exceeds the tax benefit, the allowance credit stands and there's no clawback. Before deciding whether to keep or switch your Riester-Vertrag, it's therefore worth checking your personal tax rate precisely.

The principle of deferred taxation also remains decisive for contracts that continue being paid into from 2027. While your contributions and the returns on them grow tax-free during the accumulation phase, the later lifelong pension payments are fully taxed as other income. This is advantageous for many savers, since your personal tax rate in retirement is usually lower than during your working life. All tax calculations shown are for illustration of the statutory system. Not investment advice under § 1 Abs. 1a Nr. 1a KWG.

Guarantee obligation and contribution protection in existing contracts

Existing Riester contracts enjoy statutory grandfathering under § 5 AltZertG and can continue to be paid into unchanged from 1 January 2027. For savers, this means that all previously agreed terms, along with the familiar subsidy system of basic allowance and child allowance, remain fully intact, since full grandfathering applies to contracts from before 2027^[8]. The legal foundation of every existing Riester contract is the provider's obligation to provide a full contribution guarantee: by the agreed pension start date, 100 percent of the own contributions paid in, plus all state allowances, must be guaranteed and available.

The effect of the contribution guarantee on return structure

This statutory 100 percent contribution guarantee, however, has a direct effect on the investment structure and the return potential of your contract. To meet the guarantee promise at every point in time, product providers use mathematical value-protection models. If prices on the financial markets fall, providers are forced to shift the contract balance out of higher-return equity funds and into lower-risk but lower-return bonds or guarantee funds. This structure often prevents the capital from participating in a recovering equity market in time. Significant ongoing guarantee costs further reduce the effective return.

For existing Riester savers, this results in a structural comparison against the new product world. While the new Altersvorsorgedepot can deliberately do without a contribution guarantee in order to allow an uncapped equity ratio, the Riester grandfathering arrangement is a pure security model. Anyone close to retirement benefits from this absolute capital protection. With a longer remaining term, however, the return shortfall from guarantee costs weighs heavily. Whether keeping the existing contract or switching systems later is the more economically sensible option depends on your individual contract costs, remaining savings time, and personal investment goals.

Continuing the contract versus suspending contributions: your options at a glance

For holders of existing Riester contracts, statutory grandfathering from 1 January 2027 offers full financial flexibility if your circumstances change. You are never obliged to cancel your existing contract without thinking it through, or rush into switching to a new pension product. If you let your Riester-Vertrag rest, the state allowances you've already received, along with the returns accrued so far, remain fully secured. We compare the three key options so you can make a transparent decision.

Comparing your options from 2027

Suspending contributions is a legally secure solution if you want to protect your monthly liquidity. Because the contract remains in place, the Zentrale Zulagenstelle für Altersvermögen (ZfA) does not claw back any state subsidy. If your circumstances change, you can resume contributions at any time. If you merely reduce your contributions, the annual basic allowance of 175 euros is reduced proportionally, if the required minimum own contribution of 4 percent of the previous year's gross income is not met.

You're also free to redirect part of your contribution rate into alternative investments and keep your Riester-Vertrag as a guaranteed base. We recommend always checking the exact allowance rate before making any planned adjustment, to avoid unwanted subsidy losses. All model calculations and comparisons are for guidance only (not investment advice under § 1 Abs. 1a Nr. 1a KWG).

Switching subsidy systems without switching provider: moving to the new subsidy model

Besides simply continuing under the old allowance system or switching provider entirely, lawmakers offer a third option from 2027: you can keep your existing Riester-Vertrag unchanged and, by declaration to your provider, switch exclusively into the new tax subsidy system. All the contractual terms, guarantees and the chosen investment model of your existing contract remain fully intact through this step.

Advantages and disadvantages of the new subsidy system within an existing contract

• Higher basic subsidy for many income groups: the new percentage-based subsidy can offer greater state support than the previous fixed-amount rule, for flexible contribution rates.
• The contribution guarantee is preserved: since the existing contract continues, the agreed guarantee framework (such as the 100 percent contribution guarantee) is unaffected.
• No direct increase in investment return: you remain in the existing product structure and don't benefit from the higher-return asset class of an Altersvorsorgedepot.
• Individual subsidy difference: for families with several children, the existing allowance system can work out more favourably in the numbers than the new structure.

No product or provider switch is needed for the change. A written declaration to your existing bank or insurer is enough, applying for the subsidy switch from contribution year 2027 onward. To clarify precisely whether switching systems within your existing contract pays off for your personal situation, our Riester comparison and the subsidy calculator provide source-based guidance.

When continuing to pay into a Riester contract is particularly worthwhile

Although no new Riester contracts can be taken out from 1 January 2027, contracts from before that date are covered by explicit statutory grandfathering^[10]. You can therefore keep paying into your existing contract under the existing subsidy system, on unchanged terms. Continuing contributions is especially financially attractive for families with children: the annual basic allowance of 175 euros, as well as the child allowance of 300 euros per child born after 2007, remain fully in place. This produces an excellent subsidy rate relative to your own contribution, one that's hard to match risk-free on the open capital markets.

Who benefits from grandfathering: target groups at a glance

• Families with several children: thanks to the combination of the basic allowance (175 euros) and child allowances (300 euros per child), the state contribution often makes up the majority of the total contribution, resulting in very high subsidy rates.
• Savers close to retirement: for people close to retirement, switching systems is rarely worthwhile. The remaining accumulation phase is usually too short to recoup switching costs or absorb market fluctuations in the Altersvorsorgedepot.
• Lower-income earners: with a smaller income, even a modest own contribution is often enough to capture the full state allowances, which significantly boosts the percentage return on the capital deployed.

Besides the allowances, savers close to retirement particularly benefit from the contractually guaranteed contribution protection and a predictable minimum pension. We recommend carefully weighing your individual contract costs against the remaining term before making a decision, to make sure your existing contract delivers exactly the stability you need for your retirement provision. (Note: the calculations and examples are for illustrative information only and do not constitute investment advice under § 1 Abs. 1a Nr. 1a KWG.)

The comparison with the alternative: continuing to pay in versus switching to the Altersvorsorgedepot

Existing Riester contracts enjoy statutory grandfathering under § 5 AltZertG and can continue to be paid into unchanged from 1 January 2027. While no new contracts can be taken out from that date, the existing subsidy system of basic allowance and contractual child allowances remains fully in place for existing contracts. If you continue your existing Riester-Vertrag, your usual subsidy basis stays untouched.

Opportunities and conditions compared directly

Comparing continuing contributions with switching to an Altersvorsorgedepot shows clearly different profiles in terms of risk, guarantees and return potential. While the capital paid into existing contracts is guaranteed by the time your pension starts, the Altersvorsorgedepot forgoes strict guarantees in favour of market-based return potential. This makes switching particularly suited to savers with a longer investment horizon, while the existing contract offers maximum planning certainty.

If you're planning to switch, you should also factor in any fees that may arise on transfer. A clear view of possible switching costs protects you from unexpected deductions. Which route is optimal for your situation depends largely on your age, remaining term and personal risk appetite. As a neutral guide, we help you choose between deciding for yourself and getting personal advice. Not investment advice under § 1 Abs. 1a Nr. 1a KWG.