Cancelling Riester: what is really left of your savings

Tilman Freyenhagen

Published on 14 October 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

This article was written by an author with the support of AI.

Which amounts are deducted when you cancel?

When you cancel a Riester-Rente (Germany's existing subsidised private pension), you do not receive the full contract balance but the surrender value (Rückkaufswert), and less than that remains after three deductions: the repayment of the state support, the acquisition and distribution costs not yet covered, and the income tax on the earnings, which is assessed through your tax return. The state support has to be repaid because the legislator classifies early cancellation as a so-called schädliche Verwendung (non-qualifying use) under § 93 EStG: the money no longer serves its intended purpose of providing lifelong retirement income. The legal consequence is set out in § 93 Abs. 1 Satz 1 EStG: the allowances attributable to the subsidised retirement savings paid out and the amounts separately determined under § 10a Abs. 4 EStG must be repaid as a repayment amount^[1].

One point deserves particular attention. If the balance held with your provider is not enough to repay the allowances and tax reductions, the Zentrale Zulagenstelle für Altersvermögen (ZfA, the central office that administers Riester allowances) reclaims the remaining amount directly from you. After a cancellation, you may therefore end up with nothing left, or even owe money^[6]. We cover the alternatives to cancelling, and why a cancellation that forfeits the state support can become expensive, separately under cancelling a Riester-Rente.

How do you calculate the payout amount?

The calculation always follows the same pattern: the repayment amount is deducted from the surrender value, and income tax on the difference is charged on what remains. The following steps show how the calculation works; you fill in the amounts from your own documents. This is not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

1. Step 1, repayment amount: Add up all allowances received and the tax advantages separately determined under § 10a Abs. 4 EStG; this total is the repayment amount under § 93 EStG^[1].
2. Step 2, payout amount before tax: Deduct the repayment amount from the surrender value.
3. Step 3, taxable difference: From the benefit, that is the surrender value less the allowances, deduct the contributions you paid in (§ 22 EStG)^[3].
4. Step 4, income tax: If the conditions for half taxation are met (see below), tax is charged on only half of the difference; otherwise it is charged on the full amount. Your personal tax rate in the year of the payout is what counts.
5. Result: The payout amount before tax minus income tax gives you the amount that is left. For comparison: without a cancellation, the capital including the state support would remain in the contract.

Do not rely on flat-rate tables from the internet for this calculation. Instead, ask for the current surrender value and the allowances received for your specific contract. Only these two figures make the calculation reliable, because the surrender value and the way costs are charged over time vary considerably by provider, product and contract year.

Why is the surrender value so low at the start?

The reason lies in how costs are spread: for Riester contracts, acquisition and distribution costs must be spread evenly over at least the first five contract years, unless they are deducted as a percentage of the contributions (§ 1 AltZertG)^[2]. If you cancel during this phase, part of these costs has not yet been covered by your contributions, and the provider deducts the remaining amount from the surrender value. In the first years of the contract, the surrender value may therefore be well below the total of the contributions you have paid in.

• Consequence of early cancellation: The share of costs not yet offset reduces the surrender value on top of the repayment of the state support.
• Once the spreading period has ended, the acquisition and distribution costs are usually fully covered; this deduction no longer applies to later cancellations.

In the early phase in particular, making the contract paid-up or transferring it is therefore usually the gentler alternative to cancelling: both keep the capital you have built up without triggering repayment of the state support. We work through step by step whether making the contract paid-up or continuing to pay in suits your situation better under making a Riester contract paid-up.

When is only half of the earnings taxed?

Only half of the difference is taxed if two conditions are met at the same time: the payout is made no earlier than your 60th birthday, or your 62nd birthday for contracts from 2012, and the contract ran for at least twelve years before the payout^[5]. If both conditions are not met, the full difference between the benefit after deduction of the allowances and the contributions is taxable (§ 22 EStG)^[3]. This half taxation applies equally to all contract types, that is Riester insurance policies, bank savings plans and fund savings plans.

An important point for context: half taxation is an exception to the basic rule, not the normal case^[5]. If you do not meet both conditions, you pay tax on the entire difference. So before any cancellation, check whether your contract meets the conditions at all, and calculate both variants.

Where do you get the figures for your contract?

For a reliable calculation, you need two pieces of information, both of which you can request in writing. First, the current surrender value, which your provider will tell you on request, because only the provider knows which costs it deducts if you cancel. Second, the overview of the allowances and tax reductions granted to you so far, which the ZfA provides through its online service; the statement includes an overview of all your Riester contracts for which the ZfA holds data^[6].

1. Ask your provider for the surrender value: Request the current surrender value in writing and ask for a breakdown of the deductions in the event of cancellation^[4].
2. Request the overview of state support from the ZfA: Through the online service of the Deutsche Rentenversicherung, you receive an overview of your allowances and tax reductions^[6].
3. Enter both figures into the calculation: The repayment amount, the payout amount and the income tax then follow from the pattern in the second section.

One more important note on this statement: as described in the first section, the ZfA can reclaim directly from you any part of the repayment amount that your balance does not cover. In addition, your Riester savings are normally protected against seizure by creditors, and this protection applies once you apply for state support on your Riester contract; if you cancel, this protection lapses and your capital can be seized^[6].

Cancel or transfer to an Altersvorsorgedepot?

Cancelling is not the only way out: from 2027, you can transfer your Riester capital to an Altersvorsorgedepot without repaying the state support; a transfer to another certified retirement savings contract in your name is not non-qualifying use (§ 93 Abs. 2 EStG). For a transfer, the following applies: the receiving provider may not charge any acquisition or distribution costs on the transferred capital, only a one-off administration fee of no more than 150 euros. Your previous provider may charge no more than 150 euros for the transfer in the first five years after the contract was taken out, after which it is free of charge; acquisition and distribution costs may be charged again on new contributions to the new contract. Also note: if you take out a new subsidised contract after 31 December 2026, the new subsidy rules apply uniformly to all your contracts. We describe how the transfer works step by step separately under transferring Riester to an Altersvorsorgedepot. So before you cancel, look into a transfer to an Altersvorsorgedepot: a criteria-based provider comparison shows you which providers accept the transfer and on what terms.

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