NPS Changes In 2025: Know New Rules On Exit, Withdrawal, Lock-In And Entry

Pension Fund Regulatory and Development Authority has amended NPS exit and withdrawal rules to give subscribers greater flexibility, choice and control over their retirement savings.

The revised rules primarily target the non-government sector, where NPS participation is voluntary, covering both All Citizen and Corporate subscribers.

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.

For All Citizen subscribers, the minimum lock-in period for premature exit has been removed, easing access to accumulated pension wealth.

At normal exit, non-government NPS subscribers can now withdraw up to 80% of their corpus as lump sum, with the mandatory annuity portion reduced to 20%.

The threshold for 100% lump-sum withdrawal has been raised significantly, with greater flexibility through systematic lump-sum or unit withdrawals for mid-sized corpuses.

Individuals joining NPS after age 60 will no longer face a vesting period and will also be eligible for up to 80% lump-sum withdrawal at exit.

Up to 25% of own contribution can be withdrawn for housing, medical needs, or loan repayment, with clearer timelines.

While core annuity requirements for government subscribers remain unchanged, higher corpus thresholds and systematic withdrawal options have been introduced.

The maximum entry and exit age under NPS has been increased to 85 years, allowing subscribers to stay invested longer.

Subscribers can now seek financial assistance from regulated institutions, with lenders allowed to mark lien on up to 25% of the subscriber’s own NPS contribution.

By simplifying exits, expanding withdrawal choices and improving liquidity, the amendments aim to make NPS more inclusive while safeguarding long-term retirement income.