NPS New Rules: 10 major changes in NPS rules, investment till the age of 85, withdrawal up to 80%.

NPS New Rules: Major changes have been made to the National Pension System (NPS). The Pension Fund Regulatory and Development Authority (PFRDA) has made these changes to make it more attractive to subscribers. It has now been made more flexible for both the private sector and the general public.

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NPS New Rules 2025 : There’s good news for investors in the National Pension System (NPS). The Pension Fund Regulatory and Development Authority (PFRDA) has made several major changes for NPS subscribers. These changes will apply to all government, non-government, and NPS-Lite Swavalamban subscribers. These changes make NPS more flexible and beneficial. Here, we’re highlighting 10 rules that have been changed.

Investment age

The biggest change is that NPS subscribers can now continue investing in their NPS account until age 85, instead of the current age of 75. This feature is available to both government and non-government subscribers. This means you can extend your retirement planning and accumulate more wealth.

Option to buy 20% annuity

Previously, when you retired or under certain circumstances, you had to invest 40% of your total accumulated wealth in purchasing an annuity. This was especially true if your accumulated corpus exceeded ₹5 lakh. However, this rule has now changed for non-government sector subscribers. They can now invest only 20% of their accumulated pension wealth in purchasing an annuity. An annuity is a type of pension plan that provides regular income after retirement.

100% withdrawal facility

Another major change is that both government and non-government subscribers can now withdraw 100% of their NPS account balance in one go, even if their deposit corpus is ₹8 lakh or less. Previously, this facility was available only under certain conditions.

Introduction of Systematic Unit Redemption

A new method of withdrawal from NPS has also been introduced, called ‘Systematic Unit Redemption’. In this method, subscribers from both the government and non-government sectors withdraw units from their NPS corpus gradually, i.e., in installments. However, to avail this facility, you must withdraw these units for at least six years. This may be beneficial for those who do not want to withdraw a large sum of money at once after retirement, but rather want to withdraw money gradually as needed.

New Corpus Slabs

The government has also created new NPS corpus slabs. There will now be different rules for corpus amounts up to ₹8 lakh, above ₹8 lakh, and up to ₹12 lakh. If your accumulated corpus is ₹8 lakh or less, you can withdraw up to 100% of your NPS retirement corpus at age 60 or under certain circumstances.

Facility to withdraw money more frequently before the age of 60 years

Now, NPS subscribers will be able to withdraw a maximum of four times before the age of 60 or before superannuation or retirement, whichever is later. Previously, this limit was three. However, each withdrawal must be spaced at least four years apart. This is a relief for those who may suddenly need money before the age of 60.

3 year gap on withdrawal of money even after 60 years

If you remain in the NPS after age 60, you can make partial withdrawals from your corpus. These partial withdrawals must now be spaced at least three years apart. However, to avail this facility, the withdrawal amount must not exceed 25% of your total contribution. If you have more than one contribution stream, it will be 25% of your ‘own contribution’.

Exit facility

According to the new rules, if an NPS subscriber ceases to be an Indian citizen, they can close their individual pension account and withdraw all of their accumulated funds at once. This is a crucial feature for those who settle abroad or acquire citizenship of another country.

Exit in case of a person missing or presumed dead

The pension body has also clarified the rules for cases where an NPS subscriber goes missing or is presumed dead. In such cases, the nominee or legal heir of the missing subscriber will immediately receive a lump sum of 20% of the total amount deposited as interim relief. The remaining 80% will remain invested and will be paid when the subscriber is declared missing and dead in accordance with the provisions of the Indian Evidence Act, 2023.

Strengthened account-centric approach

The new NPS rules replace the term “Permanent Retirement Account” with “Each Individual Pension Account.” This change further strengthens account-level ownership and management, especially in cases where subscribers have multiple accounts. This ensures that each account is managed separately and clearly.

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