Private pension provision: Lindner proposal: Up to 600 euros in funding for pension deposits

Federal Finance Minister Christian Lindner wants to subsidize a planned private pension fund with up to 600 euros per year. Private pension provision will be strengthened through a new fund that can also be filled with shares and that will be tax-advantaged, the FDP leader told the “Rheinische Post”. “People can invest in securities of their choice. The state subsidizes every euro invested with 20 cents up to a maximum of 3,000 euros per year,” Lindner explained his proposals. Savers could therefore receive a maximum of 600 euros extra from the state for their pension provision.

The minister also announced that the returns in the portfolio would remain tax-free. “This way, the compound interest effect can take full effect over decades. Tax is only due when the money is paid out in old age, as is the case with the statutory pension.”

Over a long period of time, millions of people could build up significant retirement capital, argued Lindner. “Experts have calculated that after 40 years you could even be a millionaire if you save 250 euros a month and make full use of the state subsidies.”

The traffic light coalition of the SPD, the Greens and the FDP has undertaken to reform private pension provision, and Lindner’s proposals were announced for after the summer break. So far, the state has promoted private pension provision, particularly through the so-called Riester pension. However, this is not a successful model and has been criticized. Lindner has promised changes that will allow savers to choose more risk – and thus higher returns – in this pension model. In addition, he wants to create the new pension deposit.