What happens to the Frühstart-Rente at 18?

Tilman Freyenhagen

Published on 28 July 2026 · Updated on 7 August 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

The cut-off at 18: what happens to the Frühstart-Depot

Under the federal government's key policy points — the Frühstart-Rente is not yet law; a draft bill has been announced for 2026 — the state's monthly payment of 10 euros is to end on the 18th birthday, while the existing Frühstart-Depot is to continue automatically as a regular, subsidised Altersvorsorgedepot (AVD).^[1] The capital saved so far stays protected in the contract for its intended purpose, and the now-adult account holder takes over all rights of disposal over the account. From this point, young adults can keep building the balance with their own contributions, benefit from state allowances such as the Berufseinsteiger-Bonus, or transfer the capital tax-free to another certified AVD provider.

Legal transfer, capital protection and options for continued saving

On reaching legal adulthood, legal ownership passes entirely to the child; from that point, parents no longer have access to the account. The capital built up in previous years, together with its returns, stays protected against early, unauthorised access until regular retirement age^[2], letting compound interest keep working undisturbed. If the money was held in the state collective investment during the child's minority because no parent opened an individual account, that amount can be transferred seamlessly into a personal Altersvorsorgedepot once the child comes of age.

• End of the state premium: The federal government is to stop the monthly subsidy of 10 euros when the child completes their 18th year.
• Full contract rights: All decision-making and payout rights pass directly from the parents to the young adult.
• Own AVD subsidy: Once the young adult pays in their own contributions, the standard AVD allowance rules apply, including possible bonuses for career starters.
• Switching provider without losing the subsidy: The account can be transferred free of charge to a preferred neobroker or certified AVD provider.

For parents and young adults, the 18th birthday is therefore not an abrupt break in the contract, but a seamless transition into self-directed retirement saving. The start-up capital already built up forms the basis for continuing profitable, independent wealth-building early in adult life.

Rights and contract control: the handover of responsibility

Reaching legal adulthood triggers a legal handover of responsibility for the Frühstart-Rente. Up to the 18th birthday, legal representation and account management sit with the parents or legal guardians. Once the child turns 18, sole legal control of the contract passes to them by law. From that point, parents no longer have direct access to the account, while the young adult takes over full legal control.

The 18th birthday is also to end the monthly state contribution of 10 euros that the federal government pays during minority. The existing Frühstart-Depot is by no means to be dissolved, however — it is to move seamlessly into the regular Altersvorsorgedepot system. This opens up access, for young adults, to the general state subsidy structures, including possible Berufseinsteiger-Boni and income-linked allowance support.

• Comprehensive transfer of rights: From the 18th birthday, sole representation authority and access to the contract sit exclusively with the account holder.
• End of the state's 10-euro premium: The federal government's automatic monthly allowance ends when the child's 18th year ends.
• Seamless continuation in the Altersvorsorgedepot: The existing invested capital stays in the certified Altersvorsorgedepot and continues to benefit from full tax deferral.
• Own eligibility for subsidy: By paying in their own contributions, adult savers can apply for the state Grundzulage as well as one-off bonuses.
• Pausing payments or continuing to save: Young adults decide for themselves whether to keep actively paying into the contract, let it lie dormant, or transfer it to another certified provider.

At the same time, a central protective rule of the subsidised retirement system applies: as a rule, the capital accumulated in the account stays locked in for retirement until the payout phase begins. A withdrawal that breaches the subsidy conditions before regular retirement leads to the loss of the state allowances and tax benefits. We therefore recommend that families discuss the transition together in good time, to build responsible financial awareness and adjust future contributions to the young person's current education or career situation.

Capital protection and availability: why no money is paid out

The balance saved under the Frühstart-Rente (the proposed "early start" pension for children) stays protected for its intended retirement purpose even after the child turns 18^[4]. The key policy points strictly rule out an early payout of the state-subsidised capital for short-term consumption purposes such as a driving licence or education costs. On reaching adulthood, the balance moves seamlessly into the regular Altersvorsorgedepot, with the returns and dividends generated staying tax-free in the account throughout the accumulation phase and benefiting fully from compound interest.

For young adults, the 18th birthday raises the question of disposal rights and the safety of the investment. The locked-in retirement assets serve exclusively as long-term provision for old age. Anyone who nonetheless wants to dissolve the account early would have to repay all the state subsidies received plus the accumulated tax benefits in full, which makes such a breach of the subsidy conditions financially unattractive^[5].

• Tied to its purpose: By law, the accumulated capital stays protected until the start of the pension phase.
• Tax-free accumulation phase: Ongoing gains, dividends and price appreciation in the Altersvorsorgedepot are not subject to annual capital gains tax (Abgeltungsteuer).
• Loss of the subsidy on withdrawal: An early withdrawal of capital leads to the reclaiming of all state bonuses and retroactive taxation of the returns.
• No lump-sum payout at 18: The balance does not become freely available on reaching legal adulthood.

This clear legal framework ensures that the state's start-up support achieves its real goal: the reliable build-up of capital for retirement. If you want to check how continued saving works in adulthood, a look at the Altersvorsorgedepot for young people shows which options are open after the 18th birthday.

The fallback solution: transferring the collective investment into a personal account

If parents didn't set up an individual account with a provider during their child's minority, the state subsidy is by no means to be forfeited. For this case, the key policy points provide a state fallback solution: the monthly premium of 10 euros flows automatically into a collective investment, managed and structured by birth cohort^[6]. This ensures that every eligible child benefits from the state start-up capital, regardless of whether their parents took the initiative.

A seamless move into a personal Altersvorsorgedepot

As soon as the beneficiary turns 18, control over the retirement account passes entirely to the young adult. From that point, the balance built up in the collective investment can be transferred to a certified account of their own choosing^[7]. We recommend that young adults take this step promptly after their 18th birthday, to tailor the investment structure to their own needs and benefit from more flexible return opportunities on the capital markets.

• Collective management: State contributions accumulate in a central cohort pool during minority.
• Right to transfer from age 18: On request, the accumulated capital can be moved into a personal Altersvorsorgedepot.
• Tax-free continuation: All returns remain tax-free even after the transfer, until the later payout phase begins.
• Continuing to save independently: After the switch, the young adult can pay in their own subsidised contributions to benefit from state bonuses.

This legal interface ensures that no accumulated assets are lost. The collective fallback solution closes gaps in provision and, on reaching legal adulthood, enables a smooth transition into subsidised private retirement saving.

Saving on seamlessly: how the account is self-funded from age 18

Once the child turns 18, the automatic state monthly payments of 10 euros for the Frühstart-Rente are to end, and the account is to move seamlessly into the regular Altersvorsorgedepot (AVD).^[8] From that point, sole decision-making authority sits with the young adult. They can keep building the balance with their own contributions, adjust the savings rate to their financial situation, or let the contract lie dormant for a while. The start-up capital saved up to that point, together with its returns, stays locked into the protected retirement system and unfolds its full compound-interest effect over the remaining decades to retirement.

Rules on flexibility, contribution breaks and switching provider

• Flexible own contributions: Once the account switches to AVD rules, young savers can decide for themselves how much money to invest each month. Only the statutory minimum own contribution is required to receive the full Grundzulage (the basic state allowance).
• Contribution breaks during studies or training: In periods of low or fluctuating income, the contract can be made contribution-free at any time. No cancellation fees apply, and the existing capital stays invested in the capital markets.
• Right to switch provider: The Altersvorsorgedepot is not tied to the original institution. When switching provider, the accumulated balance can be transferred to a new account free of charge or for statutorily capped switching fees.

An important lever for the start of a career is the state Berufseinsteiger-Bonus, granted to young adults under 25 the first time they save into the account themselves. Anyone who keeps saving from a young age gets the longest possible investment horizon for high-return ETF strategies. The savings rate can also be handled flexibly, so young adults stay in control at every stage of life. If personal goals change, savers can adjust their contributions to keep the account aligned with their financial situation. We recommend that parents and young adults discuss this transition together in good time before the 18th birthday.

Subsidy in adulthood: AVD allowances from legal adulthood

On the 18th birthday, the automatic state monthly payment of 10 euros for the Frühstart-Rente is to end. This by no means dissolves the contract account, though: it is to move seamlessly into the regular structure of the state-subsidised Altersvorsorgedepot (AVD).^[8] From that point, all contract rights pass directly to the young adult. The start-up capital saved by then stays invested for its intended purpose until retirement and continues to benefit from tax-free compound interest.

Grundzulage and the 200-euro Berufseinsteiger-Bonus

Once adult account holders start paying in their own contributions from training pay or salary, the regular AVD subsidy scheme applies. For young adults who build up their own savings early, the state grants an income-independent Grundzulage on the chosen own contribution. There is also a targeted incentive for the start of a career: people under 25 receive a one-off Berufseinsteiger-Bonus of 200 euros credited when they begin saving into the AVD themselves.

This seamless switch of systems ensures that early wealth-building can continue without interruption. The move from purely passive state seed funding to actively subsidised private provision gives career starters the chance to secure noticeable state allowances with comparatively low monthly savings rates.

Costs and investment structure: effective costs and portfolio options

For the Altersvorsorgedepot, into which the Frühstart-Depot is later to transition, lawmakers have set clear rules on fees: the effective costs for state-certified Standarddepots (the statutory default account) are capped by law at a maximum of 1.0 percent per year^[8]. This ceiling ensures that the state's monthly payments of 10 euros, as well as later own contributions, are not eaten up by high administration or set-up fees. Once young adults take over the account themselves at 18, this contractual cost protection under the standard model stays fully in place for them.

In practice, the Standarddepot is built on two coordinated building blocks: an opportunity-oriented return component and a low-risk safety component. Because of the extremely long investment horizon of up to 50 years, a high proportion can be invested in high-return equity ETFs in the early decades, to make the most of compound interest. As the saver gets older, holdings gradually shift into the safety component, to protect the accumulated assets from short-term market swings.

Alongside the regulated Standarddepot, young adults are free from their 18th birthday to transfer their Altersvorsorgedepot to a freely chosen provider, to access more individual portfolio options. Switching to a free account leaves the tax benefits and flexibility of self-funding unaffected. We recommend that parents and teenagers compare the respective effective costs and account-management fees carefully before any transfer. Note: The information presented here is for general information only and does not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Guidance and decision paths: what parents and teenagers should do now

Once the child turns 18, the state's Frühstart subsidy of 10 euros a month is to end automatically, while the balance saved is to stay seamlessly in the Altersvorsorgedepot (AVD).^[8] From that point, all rights to the contract pass from the parents to the now-adult young person. The transition is tax-neutral, since all returns in the account remain tax-free until the payout phase in old age. For young adults, this means full freedom to decide how they save going forward, without the existing capital losing its state protection.

Rights, capital protection and subsidy bonuses from the 18th birthday

On reaching legal adulthood, the legal and financial structure of the contract changes fundamentally. While the automatic state payments of childhood come to an end, new subsidy options open up in adulthood. The capital stays protected and is reserved for retirement provision until retirement age. Adult contract holders can make the account contribution-free, keep saving with their own contributions, or benefit from special payments such as the Berufseinsteigerbonus.

• Check the handover of the contract: Shortly before the 18th birthday, parents and teenagers should update the master data and account status with the chosen provider, so the transition runs smoothly.
• Set up contributions and allowances: From age 18, the account holder can pay in their own contributions to make use of the full state Grundzulage and any Berufseinsteigerboni under the Altersvorsorgedepot.
• Decide independently using the calculator: Digitally savvy self-deciders compare fees and subsidy rates themselves using mathematical calculator tools and choose their neobroker or provider directly.
• Neutral advice brokerage: If there is uncertainty about the right level of own contributions, or how they interact with vocational training, personal advice from independent retirement-planning experts is worthwhile.

Both the self-directed digital path and qualified advice lead to a structured continuation of the account. What matters is that the accumulated assets are adjusted to the saver's own life situation early on. All model calculations and subsidy examples serve for general guidance only and do not constitute investment advice (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).