Retirement Savings Allowance (Riester): Government Subsidy for Old-Age Provision

Government retirement grant (Riester allowance): Everything you need to know

What is the Riester allowance?
The Riester allowance is an annual government grant that supports private retirement savings through Riester contracts. Its purpose is to increase your retirement savings by adding state-funded bonuses to your own contributions.

Types of grants and current amounts (2025)

• Basic allowance: €175 per year for each eligible participant.

• Child allowance:

  • €300 per child born in 2008 or later

  • €185 per child born before 2008

• Early-career bonus: €200 one-time bonus if the contract is started before age 25.

How do you receive the full allowances?
To receive the full allowances, you generally need to contribute 4% of your previous year’s gross income that is subject to statutory pension insurance, up to a yearly maximum of €2,100 (including allowances).

• If your total annual contributions (including the allowances) meet the required level within the €2,100 cap, you receive the full allowances.

• Minimum contribution: €60 per year to qualify for allowances at all.

Who is eligible?
Eligibility typically includes people who are required to pay into the statutory pension insurance system, such as:

• Employees in compulsory pension-insured jobs

• People with child-raising periods or caregiving periods

• People receiving unemployment benefit I (under certain conditions)

Some groups may not be covered automatically, depending on their situation, for example:

• certain professions with separate professional pension schemes

• people in employment without statutory pension insurance contributions

• people who have stopped paying into the statutory pension system

Calculation examples
A common practical approach is:
4% of income – (basic allowance + child allowance) = the amount you still need to pay yourself.

Example with €35,000 income:

• 4% of €35,000 = €1,400

• Allowances (€175 + €300) = €475

• Your own contribution: €1,400 – €475 = €925

Modern processes (2025)
Since 2025, allowance applications have increasingly been checked electronically using linked tax data. This reduces errors and helps avoid corrections or repayment claims.

Benefits of Riester

• Higher retirement savings through annual government grants

• A clear funding structure with yearly allowances

• Flexibility: You can start even with limited savings capacity, especially beneficial for families with children

How to apply (step by step)

1. Open a Riester contract with a bank or an approved insurance provider.

2. Provide correct information on income and children (if applicable).

3. Keep saving each year: 4% of income – allowances.

4. Activate a permanent allowance application once, so allowances are requested automatically.

5. Check allowances via the annual statement; if conditions are met, payments are handled automatically by the responsible public body.

Final summary table

Type | Amount
Basic allowance | €175 / year
Child allowance (born 2008 or later) | €300 / child
Child allowance (born before 2008) | €185 / child
Early-career bonus | €200 one-time
Required contributions | 4% of income, up to €2,100 / year
Minimum contribution | €60 / year
Application/processing | automatic processing under the electronic conditions from 2025

— The editorial team strives to provide accurate information. However, errors or uncertainties may occur. Please treat this text as initial guidance and consult the responsible authorities for confirmed information.