Key facts
- Germany's third-pillar private pension system is set for reform.
- Individual savings accounts will be introduced from next year.
- DWS anticipates significant competition from various financial providers.
- The reform aims to replace approximately 15 million Riester contracts.
- German private financial assets exceeded €10 trillion last year.
Germany's private pension system is undergoing a significant reform, with the introduction of individual savings accounts slated for next year. This shift is expected to reshape the domestic market and attract new players, including mutual fund providers, neo-brokers, direct banks, and insurers, all vying for a share of the market currently serving approximately 15 million Riester contracts. Asset manager DWS anticipates this will lead to "maximum competition" and a potential "race to the bottom" on fees as providers offer low-cost products without capital guarantees.