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NPS Gets A Major Overhaul In 2025: What The New Rules Mean For Your Retirement Money?
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In 2025, a sweeping set of reforms by the Pension Fund Regulatory and Development Authority (PFRDA) has been announced to make NPS more attractive, flexible, and investor-friendly.
Non-government subscribers with an NPS corpus of more than Rs 12 lakh can now withdraw up to 80% of their savings as a lump sum, with only 20% mandatorily allocated to an annuity.
The National Pension System (NPS) has been largely used for tax savings. In 2025, a sweeping set of reforms by the Pension Fund Regulatory and Development Authority (PFRDA) has been announced to make NPS more attractive, flexible, and investor-friendly.
Here’s a simple breakdown of what has changed.
Higher lump-sum withdrawals at retirement
One of the most significant changes is the higher cash withdrawal limit. Non-government subscribers with an NPS corpus of more than Rs 12 lakh can now withdraw up to 80% of their savings as a lump sum, with only 20% mandatorily allocated to an annuity. Earlier, 40% had to be annuitised, a provision that often reduced post-retirement returns.
New withdrawal slabs for smaller NPS corpus
PFRDA has introduced a new withdrawal framework based on corpus size, offering greater flexibility to investors with lower balances.
Subscribers with a corpus below Rs 8 lakh can withdraw 100% of the amount as a lump sum. Those with a corpus between Rs 8 lakh and Rs 12 lakh can choose between phased withdrawals using Systematic Unit Redemption (SUR), partial lump-sum withdrawal combined with annuity purchase, or higher lump-sum withdrawal depending on subscriber category.
Systematic Unit Redemption (SUR) introduced
A key structural reform is the introduction of Systematic Unit Redemption, which allows subscribers to withdraw their NPS corpus gradually over a minimum period of six years. This enables a steady post-retirement income stream without locking funds into an annuity.
Investment age limit extended to 85 years
Subscribers can now remain invested in NPS until 85 years of age, up from the earlier limit of 75. This benefits investors who want to delay withdrawals or continue compounding their retirement corpus beyond the traditional retirement age of 60.
More flexibility in partial withdrawals
Before turning 60, NPS subscribers can now make up to four partial withdrawals, compared with three earlier, with a minimum gap of four years. Withdrawals of up to 25% of own contributions are allowed for specified purposes such as education, marriage, home purchase and medical emergencies.
After 60, subscribers who continue investing can make partial withdrawals with a minimum gap of three years between transactions.
Multiple schemes under one NPS account
Non-government subscribers can now hold multiple schemes under a single PRAN, allowing them to diversify across fund managers and investment strategies without opening separate accounts.
100% equity option for long-term investors
From October 2025, private, corporate and self-employed subscribers can invest up to 100% in equities under the Multiple Scheme Framework, up from the earlier cap of 75%. This option is designed for younger investors with long time horizons who can tolerate higher volatility.
Switching between MSF schemes, however, is restricted for the first 15 years or until age 60.
NPS can now invest in gold, REITs and IPOs
NPS equity schemes are now permitted to invest in gold and silver ETFs, REITs, equity AIFs and IPOs. The combined exposure to these assets is capped at 5% of the equity allocation, offering diversification without excessive risk.
Scheme A discontinued: What subscribers must do
Subscribers invested in Scheme A, which focused on alternative assets such as infrastructure, must switch to Scheme C or Scheme E by December 25, 2025. The scheme is being phased out due to low participation and liquidity challenges.
Other investor-friendly changes
Several additional reforms have further improved NPS attractiveness. These include removal of the five-year lock-in for non-government subscribers, permission to pledge NPS corpus to obtain loans (up to 25% of own contributions), and enhanced tax benefits for NPS Vatsalya contributions under Section 80CCD(1B).
Clearer exit and family protection rules
Exit rules have also been streamlined. Subscribers who renounce Indian citizenship can withdraw their entire corpus. In the event of death, nominees or legal heirs receive 100% of the corpus if no annuity has been purchased. Interim relief provisions have also been introduced for cases where a subscriber is legally declared missing.
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December 19, 2025, 16:15 IST
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Two ads promoting British beef and milk have been banned after television presenter and environmental campaigner Chris Packham complained that they misled consumers about the products’ carbon footprints.
Both ads for the Agriculture and Horticulture Development Board’s (AHDB) Let’s Eat Balanced campaign used the carbon footprint of British beef and milk to promote the products, firstly stating: “British beef not only tastes great, but has a carbon footprint that’s half the global average*.”
The asterisk linked to text that stated: “Full lifecycle emissions of CO2 eq (carbon dioxide equivalent) per kg of beef.”
The ad for milk stated: “British milk not only tastes good, but is also produced to world-class standards, and has a carbon footprint a third lower than the global average.”
Packham complained to the Advertising Standards Authority (ASA) that the ads, and specifically the carbon footprint claims, were misleading as they did not reflect the full environmental impact of British meat and dairy.
The AHDB said the ads’ mention of carbon emissions would be understood in relation to the environmental impact of beef and milk that occurred between the “cradle-to-retail” stages.
But the ASA said the average consumer “being reasonably well-informed, observant and circumspect” would understand the claims to apply beyond the retail stage and include actions such as cooking and wastage.
The ASA said: “While we acknowledged the potential difficulties in producing post-retail emissions data, the claims in the ads suggested those emissions were included and we therefore expected the evidence provided to also include them.
“We therefore concluded that the evidence presented was insufficient to support the full life-cycle claims in the ads, which was how the average consumer was likely to interpret them.
“We reminded AHDB that environmental claims should be based on the full life cycle unless the ad stated otherwise.”
AHDB’s director of communications and market development, Will Jackson, said: “Let’s Eat Balanced is doing what it was designed to do, providing clear, factual, evidence-led information about British food, nutrition and farming standards.
“Since the investigation began, we have conducted independent consumer research which found that the majority of respondents interpreted these adverts as relating to the production phase only, from farm to retail.
“This research provides important insight into consumer understanding and supports our belief that consumers were not misled by the information we shared in these two specific adverts.”
BENGALURU: India’s Gen Z workforce is embracing what experts describe as “portfolio careers” – balancing multiple professional identities and income streams simultaneously. New research from LinkedIn shows that 75% of Gen Z entrepreneurs in India now manage multiple income streams, significantly higher than the 62% among Gen X entrepreneurs. The findings point to a growing preference among younger professionals for flexibility, autonomy and diversified sources of income. “We’re also seeing the rise of the ‘portfolio era’, with more professionals creating multiple income streams and redefining what a career can look like. This shift is making entrepreneurship more accessible than ever before,” said LinkedIn India country manager Kumaresh Pattabiraman.Rather than depending on a single full-time role, many professionals are simultaneously building businesses, freelancing, consulting, creating online content and monetising specialised skills through digital platforms. The trend comes amid a broader rise in entrepreneurial activity in India. LinkedIn recorded a 104% year-on-year increase in members adding “Founder” to their profiles – the highest growth among all global markets.AI is also emerging as a major enabler of this shift. The report found that 85% of Gen Z entrepreneurs consider AI and digital tools important to their business operations.
Sam Altman said Elon Musk tried many times for total control of OpenAI, which he’s now suing.
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