Bundestag votes Friday, 16 October, on a 10-euro monthly state pension plan for children

What the bill would do

The Bundestag votes on Friday, 16 October 2026, on the Frühstartrente, a measure the Union and SPD coalition agreed as one building block of retirement provision, ahead of a broader pension reform whose draft is not yet ready. The Finance Committee adopted the final changes to the bill on Wednesday, 14 October. The Bundesrat must also approve it, and the law is expected to take effect in early January 2027.

Children aged six to 18 who were born in 2020 or later and are registered in Germany would receive 10 euros a month from the state, paid into a retirement savings account in the child's name. That adds up to 1,440 euros over twelve years. Eligibility would be checked digitally against the tax identification number held by the Federal Central Tax Office, so parents would not need to file an application.

Who is covered and when

Children born in 2019 or earlier would receive no state payments. For older children, parents may open such a depot and pay in themselves, but no state subsidy applies. The first cohort is the 2020 birth year, the children turning six in 2026, and the scheme is retroactive from 1 January 2026, although the first money is only due in 2027. Each later year adds the next birth cohort, so children born in 2021 would join in 2027 and those born in 2022 in 2028. Around 770,000 babies were born in Germany in 2020, according to the Federal Statistical Office.

Two routes for the money

Parents must choose where the money goes. The first route is a certified standard depot contract in the child's name with a bank, savings bank or online broker. It can be opened online without mandatory advice, and providers may charge no account opening or sales fees until adulthood. Annual costs are capped at 1 percent of the depot value, and parents, grandparents or other sponsors can add up to 6,840 euros a year, or 570 euros a month, per child.

If no contract is opened, the federal government would place the monthly payments in a special fund managed by Bundesbank, with that arrangement starting on 1 January 2028. Under the amended rules, the fund may invest only in broadly diversified global shares or share funds. No return is guaranteed, and the federal government would not cover losses. Banks and fund providers had pushed to lift the fee ban until the final stage of the process.

Finance ministry projections

The Finance Ministry's model assumes an average annual return of 7 percent, which it describes as the long-run average for globally diversified share investments after costs. On that basis, the state payments alone would reach about 2,200 euros by the 18th birthday and about 53,000 euros by age 65 if nothing else is paid in. Parental top-ups of 10 euros a month would lift the projection to about 107,000 euros at 65, and 50 euros a month to about 320,000 euros. The ministry says actual returns could be higher or lower, and payouts are in principle not made before age 65.

Costs, criticism and the phased rollout

The federal government plans spending of 198 million euros in 2027, rising to 411 million euros by 2030. The coalition is keeping the staged plan, citing costs, and did not extend the scheme to all birth years. Insurers asked during the hearing for every cohort to be supported. In the first reading, Green MP Stefan Schmidt called the age cutoff 'simply unjust', since children born before 2020 receive nothing.