The German cabinet has approved an early-start pension scheme that will see the state contribute 10 euros per month into a retirement savings account for every child from age six until they turn 18. Finance Minister Lars Klingbeil, who also serves as vice chancellor, championed the measure as a way for young people to build personal wealth and learn financial planning early.
The programme applies retroactively from 1 January 2026 to children born in 2020, with each subsequent cohort of six-year-olds added annually from 2027. Returns remain tax-free until payout, which cannot begin before age 65. Families may choose a private provider or default to a Bundesbank-managed public fund. The finance ministry estimates state contributions alone could grow to roughly 53,000 euros by retirement, assuming a 7 percent average annual return.
The plan drew sharp criticism. The Left party dismissed it as a pointless project, and IG Metall called the 10-euro monthly sum a lure toward fund providers. CDU General Secretary Franziska Hoppermann defended the initiative.