Bundesbank chief urges pension overhaul with higher retirement age and ETF savings plan
Joachim Nagel, President of the Bundesbank, has pushed for major changes to Germany’s pension system. He supports a new savings plan set to replace the Riester pension in 2027. At the same time, he argues that the statutory retirement age must rise in line with increasing life expectancy.
Nagel welcomed the government’s decision to introduce a new pension savings plan from 2027. This scheme will allow subsidised investments in exchange-traded index funds (ETFs). He described it as a crucial move to boost capital-backed pensions but warned that its benefits will take years to appear.
In a broader call for reform, Nagel insisted that raising the retirement age is unavoidable. After 2031, he proposed linking it directly to life expectancy. His reasoning is simple: as people live longer, they should spend part of that extra time working. Nagel stressed that without such adjustments, the pension system will face growing financial strain. His comments come as Germany debates how to secure pensions for an ageing population.
The new savings plan marks a shift from the old Riester model, offering more investment flexibility. Yet Nagel’s warnings highlight the long-term challenges ahead. Any real impact from these changes will only become clear over time.
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