Discussions continue surrounding Germany’s planned early start pension scheme, sparking debate over its structure and implementation. According to reports from business magazine “Capital” the Social Democratic Party (SPD)-led Finance Ministry is now considering replacing the initially envisioned privately managed solution involving children’s savings accounts with a state-administered fund, known as a “Kenfo.
Current plans indicate that the initial rollout will be restricted to children born in 2020, who will celebrate their sixth birthday in 2026. Approximately 100 million euros have been allocated in the budget to support this initial cohort, leaving older children ineligible for the program.
The proposed shift has drawn criticism from both within the governing coalition and from online brokerage platforms, or “Neobrokers”. Representatives of the conservative Union party have expressed fundamental opposition to a collective model, asserting that it contradicts agreements outlined in the coalition treaty. They advocate instead for cultivating financial literacy among children from an early age through engagement with privately managed investment accounts, rather than a one-time payout at age 18.
Scalable Capital, a prominent Neobroker, stated to “Capital” that maintaining the original privately managed solution is “essential” for safeguarding assets from state intervention and facilitating the desired learning effect. Thomas Soltau, CEO of Smartbroker, echoed this sentiment, describing the current plans as “embarrassing”. He emphasized that a collective solution would eliminate the opportunity for individual contributions and active involvement in understanding financial matters.
The original concept for the early start pension, as stipulated in the coalition agreement between the SPD and Union parties, proposed monthly payments of 10 euros for each child aged six and above, starting in January 2026, to be deposited into privately managed investment accounts – intended to lay the groundwork for independent retirement planning. Several Neobrokers have already presented or announced specialized investment account offerings in anticipation of this initiative.