Frühstartrente: 10 Euro a Month per Child

Germany is moving ahead with a new savings scheme for children, and foreign parents living in the country should know how it works. Finance Minister Lars Klingbeil (SPD) has sent the draft law for the so-called Frühstartrente into inter-ministerial coordination, according to a dpa roundup on 22 July 2026 based on a draft dated 21 July. The Frühstartrente, which translates roughly as “early start pension”, would see the state pay 10 euros a month into an individual, funded retirement depot for every child in Germany between the ages of 6 and 18.

The idea is to give children a long runway for their money to grow before they ever reach working age. The 10 euros per month is public money that goes into a private investment account, and because the payout cannot happen before the age of 65, decades of compounding are meant to turn small contributions into a meaningful sum. The scheme is a coalition project of the SPD and the Union, and it is now at the stage where other ministries review the text before it can go to cabinet and then parliament.

How the Frühstartrente would work

Under the draft, the state contribution of 10 euros a month flows into an individual depot for each eligible child. Parents choose the provider, either a private investment product or a public capital investment option, so the money is invested rather than parked in a savings book. Any returns earned inside the depot stay tax-free until the money is finally paid out, and that payout can only begin from the age of 65.

Families are allowed to top up the account themselves. According to the draft, private contributions of up to 6,840 euros a year, or 570 euros a month, are permitted on top of the state’s 10 euros. The Tagesspiegel cited example calculations assuming 7 percent annual growth: with no parental additions a depot could reach around 53,000 euros by age 65, rising to about 107,000 euros with an extra 10 euros a month and around 320,000 euros with 50 euros a month. These figures are illustrations, not guarantees, and real returns depend on the markets.

When the Frühstartrente starts and who is covered

The scheme is designed to phase in by birth cohort rather than all at once. It would begin with children born in 2020 and is backdated to 1 January 2026, so that cohort is the first to receive state money. From there, a new group of six-year-olds joins each year, gradually building up coverage of all children in the target age range. No application is required; eligible children are meant to be enrolled automatically.

Older children who are already past the starting cohort do not receive the state’s 10 euros retroactively, though families can still open private depots without the subsidy. For the federal budget, the draft puts the cost at roughly 198 million euros a year at the start, rising to around 411 million euros by 2030 as more cohorts come on board. The coalition’s stated aim is to help lower-income households build private retirement savings that they might otherwise never start.

Criticism from social groups

Not everyone welcomes the plan. The Sozialverband Deutschland (SoVD), one of Germany’s large social welfare associations, has criticised the Frühstartrente as risk-laden and as favouring the insurance and finance industry more than families. Its core objection is that tying children’s future security to capital markets exposes them to investment risk, and that the money would be better spent strengthening the statutory public pension that most people in Germany rely on.

Supporters counter that the scheme introduces children early to funded, long-term investing and that the very long time horizon smooths out short-term market swings. The debate mirrors a wider argument in Germany about how much of retirement provision should rest on the pay-as-you-go public system and how much on private, capital-based products. Because the law is still only in ministerial coordination, its details could change before it is passed.

What foreign parents in Germany should know

For expat families, the key point is that eligibility is expected to follow the child, not the parents’ nationality, so children living in Germany in the qualifying cohorts should be covered like any other. If the law passes as drafted, there is no form to fill in for the state contribution, but you would choose where the depot is held, which makes it worth comparing providers and fees. Because payout is locked until 65, this is strictly long-term money and not an emergency fund.

The Frühstartrente sits alongside the benefits families in Germany can already claim, so it helps to see the full picture. Our guide to child and family benefits covers the support available for children today, while our overview of pension plans and retirement explains how public and private provision fit together. Keep an eye on the legislative process, as the terms that finally reach parliament are what will apply to your children.