Search
  • Project
  • Opportunities

The Initial Capital

Published
December 8, 2025
Status
ongoing

Background

In Germany, social mobility is still strongly shaped by family background. Children from wealthy families benefit from savings, educational support, and knowledge about how to manage money. Those who lack these advantages start out at a disadvantage that is difficult to overcome, even with great personal effort. Our latest survey data show that the vast majority of people want social mobility to depend more on individual achievement and for young people to have equal starting opportunities. At the same time, trust in the promise of merit is declining: many citizens doubt that hard work truly pays off when starting conditions are so unequal.

To restore this trust, we need approaches that go beyond short-term redistribution and focus instead on long-term empowerment. Investing in young people is therefore also an investment in society as a whole. Financial education improves decision-making, helps prevent excessive debt, encourages entrepreneurship, and contributes to sustainable prosperity. In an increasingly complex world, it becomes a key skill—enabling people to understand risks, recognize opportunities, and make informed choices, whether in career decisions, saving, or sustainable investing.

Motivation

Equal opportunity begins earlier than the point at which the welfare state’s reactive transfer payments take effect. From early childhood onward, it is shaped by whether we learn how to manage money—and whether any capital is available at all to build something over time. Education alone is not enough if the material foundation is missing. Conversely, money only reaches its full potential when people have the knowledge to use it wisely.

Financial education and early material support must work together so that family background has less influence on life trajectories.

Especially in Germany, there is significant catching up to do. Many young people leave school without ever having learned about investing, insurance, or debt management.

The welfare state must move beyond constant reaction and instead focus on proactive empowerment. Through financial education and initial capital, Initial Capital creates genuine opportunities for people to take social mobility into their own hands.

Moritz Rüppel – Project Lead and Head of Policy & Projects

Concept

One solution is Initial Capital: the state provides a capital-funded investment account for each child, which is transferred into their own management upon reaching adulthood.

This requires proof of financial education through a standardized financial literacy certificate. Without this personal commitment, the funds remain in managed custody and are only paid out upon retirement—similar to the planned early-start pension scheme.

Initial Capital views the state as an enabler that not only reacts to disadvantages but proactively creates opportunities while also fostering personal responsibility.

The goal is to promote financial skills and individual wealth building. If this empowerment can be achieved broadly, it can restore waning confidence in the promise of upward mobility and strengthen social mobility.

Publications

  • Policy Brief
The Initial Capital

Many people start life with insufficient opportunities. The concept of Initial Capital combines financial support with practical financial education and establishes a capital-market-based investment account for each child. After acquiring basic financial knowledge, the balance is transferred into a securities account upon reaching adulthood, creating new opportunities, strengthening personal responsibility, and promoting social mobility.

Read now

Blog

  • 3 Authors
September 10, 2025

A Rare Opportunity: Using the European Child Guarantee as an Incubator of Innovation

Many children lack opportunities in life, even in rich states like Germany. The European Child Guarantee could be a remedy – if EU Member States are ready to learn from each other.

Team

Moritz Rüppel

Head of Policy & Projects

Moritz Rüppel heads the Policy & Projects division. His work focuses on the political and strategic orientation of the department, proactively setting the agenda for the topics it addresses, and transferring research findings to the parliamentary and pre-political arena. Moritz also represents the department in dealings with political actors.

© 2026