Early-start pension - pension for a child from 6 years old

Updated:
07.10.2026

On 12 August 2026, the Cabinet approved the Frühstartrente (early-start pension) bill; its first reading in the Bundestag took place on 25 September. From the age of six, a child will be able to receive state support for their pension savings — €10 a month. We explain who is eligible, how much will realistically be accumulated, and what parents should do right now.

What exactly did the Cabinet decide?

On 12 August, right between the eclipse and the peak of the Perseids, the Cabinet of Ministers got down to work in the middle of the holiday season. Not the most obvious time for pension reform — but, evidently, everything had been decided behind closed doors long ago.

In essence: the government approved the Regierungsentwurf (government draft bill) on the Frühstartrente. A child receives a state contribution to an individual retirement account from the age of six. The contribution continues until they reach the age of majority.

Imagine a conversation between future ten-year-olds: “What’s your pension portfolio like?” — “Diversified: Lego, Roblox and a bit of ETF.”

Conditions: who is eligible and what needs to be done

The bill has been approved by the cabinet and had its first reading in the Bundestag on 25 September 2026, but it has not yet been passed — the details of the mechanism will be refined

Parents open an Altersvorsorgedepot (AVD, a state-subsidised pension investment account) in their child’s name with a private provider of their choice
The state deposits €10 a month into it — from the ages of 6 to 18
Total from the state over 12 years: €1,440
Children aged from 6 to 18, born in 2020 and later, are entitled to the contributions
Main place of residence in Germany (erster Wohnsitz)
The child is entitled to the contribution if their first residence is in Germany and they have a Steuer-ID (German tax identification number); where the parents live does not matter (according to the bill)

Six-year-olds are the first to be included in the scheme, with roll-out being phased. Contributions will be backdated to 1 January 2026, while the law itself is scheduled to enter into force on 1 January 2027.

Sort out the Altersvorsorgedepot

More details

How much will actually accumulate

An annual return of 7 % is the government’s projected scenario, not a guarantee:

by the age of 18 the depot will hold approximately 2.200 €; if the money stays invested until retirement — theoretically about 53.000 €; if parents top it up by another €10 a month until the age of 18 — the pension total will be around 107.000 €.

The real return will depend on what exactly the money is invested in, the fees and the market situation. Inflation hasn’t gone away either: €53,000 in sixty years is not today’s €53,000.

If the parents haven’t opened a depot

Contributions do not disappear. The state accumulates them collectively on the capital market, under the management of the Deutsche Bundesbank.

Later, the child will be able to transfer the accumulated funds into their own AVD contract — up to the age of 35. If this is not done, the funds are returned to the federal budget.

Taxes, fees and access to money

The money is tied to a pension goal: as a rule, it cannot be withdrawn before the age of 65.
In the accumulation phase, income is not taxed; tax arises upon payout
For certified contracts, the cost ceiling is 1 % per annum
Until the age of 18, there are no acquisition and distribution costs (Abschluss- und Vertriebskosten); ongoing costs are capped at 1 % a year

This fundamentally differentiates the design from a standard brokerage account in a child’s name — there the money is accessible at any time, but there are no tax reliefs either. The logic is the same as for an adult’s Altersvorsorgedepot, which launches in 2027.

What is concerning

The government wants to get people used to long-term saving literally from their school days. And that is not a bad thing. But €10 a month from the state in 2026 is more of a symbolic gesture than a pension revolution. An important item on the to-do list of the Bundesregierung (federal government)? Yes. But a modest reality for an individual family.

The calculation, apparently, is different: the first €10 are meant to open the portal to further independent savings. So that the parents see the portfolio, start topping it up themselves, and the child then continues to invest independently later on.

Questions remain as to where contributions will be invested and what the real rate of return will be, and what fees specific programmes will have. A separate criticism of the design is that the account is not opened automatically; everything relies on the parents’ initiative. For low-income families, such initiative is statistically lower, meaning that the savings gap might not narrow, but rather become entrenched.

What parents should do now

Check whether the child meets the following conditions: born in or after 2020, the child’s own first residence in Germany, and a Steuer-ID; where the parents live does not matter (according to the bill)
No need to rush to open a depot “just in case” — the bill is still in the Bundestag, and the requirements for certified contracts have not been finalised.
Find out in advance how the pension system in Germany works – the children’s depot is just one building block
Decide the main question: are you willing to pay extra? The difference between 53 000 € and 107 000 € is your 10 € a month, not the state’s

Our detailed guide explains how the pension system in Germany works, helping you understand where the children’s depot fits in.

But a pension is only one of the things parents think about early on. Health cover for your child, protection in case of an accident and savings up to age 18 are all on one page: insurance and savings for children in Germany.