German Riester new business ends on 1 January 2027. What happens to the 14.663 million existing contracts is the most frequently asked and most poorly answered question of the reform, because the answer that is most often correct earns nobody anything. This is not advice but a decision tree: four options, four questions in a fixed order, and why the three million dormant contracts are a case of their own.
14.663 million contracts and a question nobody answers
At the end of 2025 Germany had 14.663 million Riester contracts. The peak was 16.61 million in 2017. Around three million of them are dormant, meaning nothing flows in any more. From 1 January 2027 not a single new one will be added.
What happens to the existing ones is the most frequently asked and the most poorly answered question of this reform. The reason is structural rather than malicious: a provider may not tell a customer to cancel, and an intermediary earns nothing when somebody leaves everything as it is. The answer that is most often correct is exactly the one nobody likes to give.
So this piece offers no recommendation but a decision tree. At the end there is no number, only the order in which to read your own paperwork. The overview of the new law is in Germany’s New Retirement Account.
First, clear up the misunderstanding
The most common error is that Riester is being abolished and you have to act now. That is wrong, and the error is expensive because it produces decisions under time pressure.
What ends on 1 January 2027 is new business only. Existing contracts continue unchanged, with their guarantees, their subsidies and their terms. Nobody is switched over, nobody loses anything, and there is no deadline by which something must be decided.
The four options, and when each fits
All four options remain open after 1 January 2027. What ends on that date is new business only. Status: 12 August 2026.
The decision tree: four questions in this order
The order is not arbitrary. Each question can settle the ones after it.
Question 1: what technical interest rate does the contract carry? That is in the original contract, not in the annual statement. Contracts written up to around 2004 often carry a guaranteed rate that no longer exists in the market. If it is high, the answer is usually keep, and the remaining questions fall away.
Question 2: are the acquisition costs paid off? Acquisition costs are charged in the early years. Anyone past that phase has already paid the expensive part. Switching then means paying the same kind of cost a second time. Anyone still in the middle of it is in a different position.
Question 3: what does the contract cost per year, in euros? Not in per cent, in euros. Percentages on a small balance sound harmless and are not. On a dormant contract with little capital, flat annual fees can consume the entire return. That is the most common case in which freezing is the worst of all options.
Question 4: how many years remain until retirement? A transfer needs time for lower costs to pay back the cost of transferring. Below roughly ten years it rarely works. Above twenty years it can be substantial.
The three million dormant contracts are their own case
Around three million contracts are dormant. They are the reason I think this piece is needed, because for them the comfortable answer is precisely wrong.
A dormant contract receives no further subsidies, because subsidies require contributions. It still carries costs. In some tariffs those are fixed amounts per year, independent of the balance. On a balance of a few thousand euros that is a cost ratio exceeding any plausible return. The money shrinks slowly, quietly, and without anybody being notified.
So anyone holding a dormant contract should establish exactly one number: what it costs per year in euros. That figure is in the annual statement, usually not on the first page. It decides between leaving it alone and moving it faster than any return forecast.
What a provider may not write, and I can
There are constellations in which the correct answer is: this contract was a mistake, and the sooner it ends the less it costs. No provider and no intermediary will write that sentence, and that is a description of the incentives rather than an accusation.
The constellation usually looks like this: a contract from the late 2010s, high ongoing costs, no meaningful guaranteed rate, a small balance, and a saver who stopped paying in years ago. Here, leaving it alone is not the neutral option but the expensive one. There is no neutral option, because doing nothing also costs money.
The reverse holds just as firmly: anyone with a 2003 contract carrying a four per cent guarantee should not touch it, whatever the new product promises. Contracts like that cannot be manufactured today.
What the new system means for the self-employed is calculated in Germany’s New Retirement Account for the Self-Employed. My running commentary sits under crypto and finance.
Sources and status
- German retirement reform act, promulgated 29 May 2026: no new Riester contracts from 1 January 2027; existing contracts continue unchanged.
- Riester stock: 14.663 million contracts at the end of 2025, against the peak of 16.61 million in 2017.
- Dormant contracts: around three million with no ongoing contributions, estimated by the Federal Ministry of Labour and Social Affairs at a good fifth to just under a quarter of the stock.
- On transfer, subsidies already received do not have to be repaid; transfer, acquisition and distribution costs may apply.
- All statements on the legal position as of 12 August 2026.
This article is an entrepreneur’s assessment of the legal position and constitutes neither investment nor tax advice. Seek professional advice for your own situation.
Frequently Asked Questions
Is the Riester pension being abolished in 2027?
No. What ends on 1 January 2027 is new business only. Existing contracts continue unchanged with their guarantees, subsidies and terms. Nobody is switched over automatically, and there is no deadline by which anything must be decided.
Do I have to cancel my Riester contract now?
No, and time pressure is a poor adviser here. All four options, keeping, freezing, switching to the new subsidy system or transferring out, remain open indefinitely. Anyone being pushed towards a quick decision should ask who earns from it.
Do I have to repay subsidies if I transfer out?
Subsidies already received do not have to be repaid when moving into a new subsidised product. Transfer, acquisition and distribution costs may apply, however, and those usually decide whether the move pays.
What does a dormant Riester contract cost?
That is the decisive number and it appears in the annual statement, usually not on the first page. Some tariffs charge fixed annual fees regardless of the balance. On a small balance that can exceed any return, so the capital shrinks quietly without anybody being notified.
When is it worth switching to the new retirement account?
Mainly when the old contract carries high ongoing costs, offers little guaranteed return and many years remain until retirement. Below roughly ten years of remaining term, lower costs rarely repay the cost of switching. Above twenty years the difference can be considerable.
How do I know I should keep my contract?
Look at the technical interest rate in the original contract, not in the annual statement. Contracts written up to around 2004 often carry a guaranteed rate that cannot be produced in today's market. If it is high and the acquisition costs are long paid off, keeping is usually right.
How many Riester contracts are still in force?
14.663 million at the end of 2025, against the peak of 16.61 million in 2017. Around three million are dormant, meaning no contributions flow. The Federal Ministry of Labour and Social Affairs estimates that at a good fifth to just under a quarter of the stock.
Warm regards,
Dennis Weidner
