Status: 06.12.2023, 05:16 a.m.
By: Amy Walker
The Heating Act will come into force from January 2024. In order to cover the costs of installing a heat pump, there is a special offer from the pension insurance.
Berlin – From 1 January 2024, the Building Energy Act (GEG), which is best known as the Heating Act, will come into force. Initially, the new regulations will only apply to new buildings. Gradually, however, the heating systems in existing buildings are to be gradually converted from fossil fuels to renewables. One of the most popular heating systems that is particularly climate-friendly is the heat pump. This is also preferred by the Green-led Ministry of Economic Affairs.
But a modern heat pump can be very expensive. Depending on the model, installation can cost over 35,000 euros – not a bargain for many people. In addition, it is often only worthwhile if the building has also been renovated. This is particularly worrying for older people who have to prepare financially for retirement. However, an offer from the German Pension Insurance should help.
Residential Riester for the heat pump? This will be possible from 2024
Specifically, the offer is aimed at people who either already have a Riester contract or are interested in one. Currently, around 16 million people in Germany already have a Riester contract.
What is a "Riester pension"?
The term "Riester pension" goes back to Walter Riester, who was Federal Minister of Labour and Social Affairs from 1998 to 2002. During his term of office, Riester had proposed the promotion of voluntary retirement provision through a retirement provision supplement. A Riester pension is therefore a form of private retirement provision that is supported by the state. Every month, Riester savers pay into their retirement provision and receive a lifelong supplementary pension at the end. With a classic Riester pension insurance, a fixed pension is guaranteed directly upon conclusion, but with a very low return. A significantly higher return is possible with the unit-linked Riester pension insurance - but this is also associated with a certain risk. However, there is a "guaranteed capital" that savers are entitled to in any case.
In order to motivate consumers to take out appropriate retirement provision, the state supports pension savers in two different ways: with allowances and tax benefits. Every year, the state pays 175 euros of basic allowance into the Riester account. So: If you pay 1700 euros a year into the Riester contract yourself, you will have 1875 euros a year in your account due to the allowance. If you have children, you will receive a further allowance of 300 euros per child per year. The tax advantage is available in particular for high earners, who can offset the Riester money saved against income tax.
In addition to the classic form of the Riester pension, there is also the so-called Wohn-Riester, which was created specifically for the purchase, construction or conversion of an owner-occupied property. In this way, the state supports the fulfilment of the dream of owning a home, which can be a kind of retirement provision for many people. There are two options at Wohn-Riester: Either you conclude a Wohn-Riester contract directly when buying or building the property; or you can take capital out of an existing Riester contract to use the money for a property.
Wohn-Riester can also be used for the conversion or modernisation of your own property. For example, older owners can finance the age-appropriate conversion of their apartment. And: From 1 January 2024, energy-efficient renovation measures will also be supported, including the installation of a heat pump or other new heating system. It is important for many owners to know that applications can also be submitted retroactively for measures that have arisen since 1 July 2023.
Many older owners are concerned about the high cost of a heat pump. © IMAGO/Wolfgang Maria Weber
According to the German Pension Insurance, no separate Wohn-Riester contract can be drawn up for an energy-efficient renovation; it is only possible to withdraw credit from an existing Riester contract in order to finance the modernisation. There is no need to withdraw the entire balance. If there is still money left over in the Riester account, it can be used to save further. The respective provider will inform you how this will affect the later payout.
Budget 2024: Lindner's austerity plan does not only cut back on citizens' money
Citizens' allowance or work: Sanctions for those who refuse to work have had little effect since their introduction
Cuts for pensioners due to budget ruling: pension insurance speaks out
Heat pump in old buildings: This is how much a homeowner pays for heating in a 117-year-old house
Study: Those who work more often have less money – researchers criticize social benefits
Fancy a voyage of discovery?
Riester subsidy for heat pumps and the like: These measures are being funded
Applications must be submitted to the German Pension Insurance, specifically to the "Central Allowance Office for Retirement Assets" department. Before submitting an application, interested parties should contact a specialist company to find out whether the planned measures are among the recipients of funding. The following energy-efficient renovation and modernization measures are supported by a residential Riester:
- Insulating walls, roof surfaces, floor slabs
- Renewal of windows or exterior doors
- Installing or renewing a ventilation system
- Renewal of the heating system
- Optimisation of the existing heating system, if it is more than two years old
- Installation of digital systems that optimize energy operation and consumption
- Costs for the issuance of a necessary certificate as well as costs for energy consultants
Anyone who built or bought the property in question less than three years ago must withdraw at least 6000 euros from the Riester contract. In all other cases, the minimum withdrawal amount is 20,000 euros.
This means that the offer is aimed more at older people or middle-aged people. In order to have saved at least 20,000 euros, the contract must have been in place for several years.
Wohn-Riester has advantages: Property is always preserved
The advantage of the Wohn-Riester is that the money you put into the property does not disappear, but helps to maintain or even increase the value of the property. With the normal Riester contract, on the other hand, you "only" receive a fixed amount of money in retirement, which is then used up over the years. The Riester money cannot be inherited either – but a property can.
By the way: In order to benefit from the Wohn-Riester, the person must intend to live in the property in question for a long time. As a rule, you still have to live in the property for at least 20 years after the start of the payout phase (from the age of 60 at the earliest). So, if you withdraw your Riester money at 60, you must know for sure that you will still be living there at 80. Otherwise, taxes on the capital must be paid in arrears.