Archive · 26 Sep 2025
NPS Changes: Increased Flexibility in Investment and Withdrawal
The National Pension System (NPS) is updating its rules!
Now, instead of having to buy an annuity with at least 40% of your money when you retire, you might only need to buy an annuity with 20%.
This means you could have more cash in hand when you retire.
You could withdraw up to 80% as a lump sum, or withdraw regularly.
Also, you may be able to leave the NPS after 15 years, which can give younger people more control of their money.
The mandatory annuitization level is proposed to be reduced to 20% of the corpus.
Subscribers can withdraw up to 80% of the retirement corpus.
20% lump-sum withdrawals will be taxed.
PFRDA proposed allowing NPS subscribers to exit after 15 years.
Early exit allows for access to funds for goals such as education, or home purchase.
- Who
- NPS subscribers
- What
- Changes to the National Pension System (NPS)
- When
- N/A
- Where
- N/A
- Why
- To increase flexibility and make NPS more attractive
- Key Change
- Reduction in mandatory annuitization to 20%
- Tax Implications
- 20% withdrawn as lump sum will be taxed
- Early Exit Proposal
- Subscribers can exit after 15 years
