What options are there for retirement provision for children?
Parents and other carers have various options available for their children's retirement provision. What matters here is paying attention to what return prospects the type of investment offers, above all over the long term, and what costs are incurred.
Early-start pension: what's behind the concept?
From 2026, the early-start pension is set to be introduced in Germany. Under it, children aged between 6 and 17 who attend an educational institution in Germany receive an account that the state subsidises with 10 euros per month. From the age of 18, this account can be paid into with your own contributions up to a certain maximum amount. The money is paid out once the retirement age applicable at that time is reached.
Until retirement, the returns from the account are set to be tax-free. Tax is only to be incurred during the pension phase. However: exactly how the early-start pension will be structured in detail has not yet been decided – nor whether it will actually be available as early as the start of 2026.
Which form of retirement provision for children is advisable?
Many traditional forms of investment, such as the savings account or a classic pension insurance, now yield returns that are too low to ensure long-term wealth accumulation. In many cases, the return after deduction of fees (which are often substantial) is below the inflation rate, meaning that the assets lose value in real terms. Buying property is also often associated with a high capital outlay, high costs, risks and limited flexibility.
Notable returns are – as the past shows – to be found above all on the stock market. To reduce the risk of price slumps in individual shares, it is best to invest in a large number of very different companies worldwide. This is particularly easy and cost-effective with broadly diversified equity ETFs.
Investing made simple
Cost-effective and high-return: retirement provision for children with equity ETFs
ETFs (Exchange Traded Funds) are exchange-traded funds that in most cases passively track an index one to one, for example the MSCI World Index. This covers the largest companies from the developed markets, while the MSCI Emerging Markets Index takes account of companies from emerging markets. So when you buy an equity ETF, you are not investing in a single company but automatically in hundreds or even thousands of shares at once.
The big advantage: ETFs are transparent, cost-effective, broadly diversified and flexible. As long as they are not active ETFs, there are no high fees for fund managers. As a result, more of the return achieved stays with investors.
How safe are ETFs as an investment for children?
The generally very long investment horizon in retirement provision for children is an invaluable advantage. It makes it possible to sit out even larger interim market fluctuations and to benefit from the growth of the global economy.
An example: anyone who invested in the MSCI World global equity index over the past 30 years was able, despite the interim financial crisis, the bursting of the dotcom bubble and the coronavirus pandemic, to achieve an average of a good 8 % return per year.
In addition, assets grow exponentially thanks to the compound interest effect: the longer the money is invested and any returns are always automatically reinvested, the more strongly it grows. In this way, even small savings instalments produce considerable assets over the course of many years.
With our free ETF savings plan calculator you can illustrate this effect very easily. Find out in just a few clicks how your child's assets can develop over the years with a globally diversified ETF portfolio.
ETF retirement provision for children: how do I proceed?
To secure your children's retirement provision with an ETF savings plan or a one-off ETF investment, you first need an account. With quirion you can, for example, open one very easily online via the video ident procedure. Our digital wealth management offers you a scientifically grounded investment concept with cost-effective, globally diversified ETF portfolios.
Retirement provision for children with quirion
With a junior account from quirion you can flexibly choose between an ETF savings plan or a one-off investment and benefit from the following advantages:
- broadly diversified global investment
- automated risk management
- continuous monitoring and regular rebalancing
- targeted investment in sustainable ETFs possible
- low wealth management fee of 0.48 % per year
Open a junior account in just a few steps and lay the foundation today for your children's financial security.
Opening an account with quirion is this easy:
Registrieren
Open an account
Deposit money
Claim your welcome bonus
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