Germany's pension reform: position paper

To ensure long-term financial security, Germany must expand its pension system to include modern, capital-based pillars and make it easy for people to build long-term wealth through investing.

‍

Berlin, 9. July 2025 - Germany stands at a turning point in pension reform. With a growing number of people turning to capital markets to secure their financial future, the country's pension system must evolve to meet the needs and expectations of a new generation of investors.

‍

In response, Upvest co-authored a joint position paper on Germany’s pension reform, together with leading banks, brokers and asset managers representing the majority of German investors.

‍

Why this matters

‍

Today’s pension landscape in Germany lags behind international peers. The pension level is 14 percentage points below the EU average, and the Riester model is no longer delivering for most savers. At the same time, demand for self-directed investing is surging. Millions of new securities accounts in recent years show that people are actively looking to take control of their financial future.

‍

This is a generational opportunity to reimagine retirement savings and provide better long-term outcomes for everyone in Germany from school-age children to working adults.

‍

Our recommendations

‍

The paper outlines five key recommendations for the planned Frühstart-Rente and Riester reform, including:

‍

1. Introducing the Altersvorsorgerdepot and combining it with the Frühstart-Rente into one well-thought through and scalable pension product

‍

2. Removing mandatory guarantees putting the capital markets at its core

‍

3. Enabling more flexible payout models, including early or partial withdrawals

‍

4. Allowing additional contributions for the Frühstart-Rente to make better use of compound interest effect

‍

5. Expanding eligibility to all taxpayers in Germany

‍

A clear call to action

‍

We welcome the proposed reform and call for the introduction of a pension product that meets the demands of today’s generation of investors. While the timelines keep shifting, we urge the government to introduce a scalable product as soon as reasonably possible, even if it means implementing it mid-year.

Millions of people are already turning to capital markets for retirement savings. Let’s build a system that meets them where they are.

‍

Download the full position paper

‍

Read the full paper here:

‍