4.3 billion euros from the state: 35 million Germans can benefit from VL funding in future

Saving with capital-forming benefits (VL) is either still unknown to many people in Germany or supposedly too complicated. However, in the best-case scenario, VL amounts can save several thousand euros over the years "for free". This is because many employers pay up to 40 euros per month into each employee's VL contract as a kind of "incentive". Since January 1, twice as many people in Germany have been able to benefit from the state subsidy, which can be added to the VL savings amount. According to estimates by the Federal Ministry of Finance, 35.2 million Germans would be entitled to receive a state subsidy in future. Previously, this figure was only around 17 million. The background to this is that the income limits for the allowance have been significantly adjusted upwards: Anyone who invests capital-forming benefits in equity funds or a building society savings contract will in future receive the state allowance up to an income of 40,000 euros as a single person or up to 80,000 euros for married couples or life partners. The total allowance per year is 123 euros - 80 euros if you use a VL equity fund and 43 euros if you have a building society savings contract or repay a property loan.

„In fact, almost every household in Germany will be entitled to a VL bonus from this year onwards. This will make saving even more widely effective than before," says Detlev Dehmelt, Head of Sales Services at Hamburg-based Sutor Bank. Investors should not miss out on this opportunity and should actively raise the subject of VL with their employer.

A total of 4.3 billion euros (123 euros per person) per year could be paid out by the state to the 35.2 million people entitled to allowances.

Almost 4,000 euros per 7-year interval "at zero cost" possible

For a home loan and savings contract or the repayment of a real estate loan, a 9 percent subsidy on a maximum amount of 470 euros can be collected - that is 43 euros per year. In the case of equity funds, it is even 20 percent allowance on a maximum amount of 400 euros - that is 80 euros per year. The savings allowance must be applied for with the tax return to the tax office. A VL contract runs for a total of seven years, of which six years are paid in and the last year is a rest year. The money can only be withdrawn after the seven years have expired.

Figures from the fund association BVI show just how high the returns can be. On a long-term average - as rolling 7-year intervals from 1962 to the end of 2022 - VL equity funds with a focus on German equities achieved a return of 7.29% per year - without a savings bonus. With a savings bonus, the return per year was as high as 10.26%. Over a 7-year interval, the EUR 2,880 paid in would thus amount to EUR 3,857.

In Detlev Dehmelt's opinion, VL saving is always worthwhile for those entitled to an allowance: "Even if an employer does not add any money to a VL contract, there is still the state subsidy as an extra bonus. Anyone who invests 400 euros of their own money in a VL equity fund and receives 80 euros or 20 percent 'on top' has secured a good return lever for long-term asset accumulation," summarizes Dehmelt.