Housing top reason for partial withdrawals under NPS in FY25: PFRDA

Housing-related needs accounted for the highest number of partial withdrawal requests under the National Pension System in FY25, with Rs 1,327.91 crore withdrawn, PFRDA data show

The highest number of requests was reported for the purchase or construction of residential houses, which stood at 172,625, of which 155,236 were settled, involving an amount of ₹1,327.91 crore partial withdrawals under the National Pension System (NPS) in FY 2024–25, according to data from the Pension Fund Regulatory and Development Authority (PFRDA) annual report released this month.

 

Recently, in a gazetted notification specifying changes in the NPS, the report said that the existing provision allowing partial withdrawal for the purchase or construction of a residential house -- provided the subscriber does not already own a house other than ancestral property -- has been retained. However, it has now been explicitly clarified that in this case, the partial withdrawal would be a one-time withdrawal.

 

 

Further, the scope of withdrawals for medical needs has been significantly widened, with the earlier restriction to a specified list of critical illnesses replaced by a broader allowance for medical treatment or hospitalisation of the subscriber, spouse, children or parents, without prescribing any specific disease list.

 

This was followed by withdrawals for higher education of children, including legally adopted children, where 30,051 requests were reported and 25,962 were settled, amounting to ₹204.31 crore.

 

Requests for treatment of specified illnesses stood at 29,268, with 27,174 cases settled, involving ₹215.88 crore. Withdrawals to meet medical and incidental expenses arising from disability or incapacitation accounted for 18,107 requests, with 14,695 settlements, amounting to ₹103.98 crore. For the marriage of children, including legally adopted children, 14,494 requests were reported and 12,742 were settled, involving ₹107 crore.

 

PFRDA recently also made changes in its partial withdrawal rule, purposes such as “skill development, re-skilling or self-development activities, as well as establishing a startup or own venture, have been removed from the eligible list,” said the notification.

 

Notably, lower volumes were observed for skill development, re-skilling and other self-development activities, where 6,133 requests were reported and 4,296 settled, involving ₹29.08 crore. Withdrawals for establishing one’s own venture or startup remained limited, with 1,060 requests, 943 settlements, and involving an amount of ₹5.74 crore.

 

A total of 271,738 partial withdrawal requests were reported during FY25, of which 241,048 were settled, involving an aggregate amount of ₹1,993.89 crore.

 

Partial withdrawal under the NPS architecture is governed by Section 20(2)(b) of the PFRDA Act, 2013, which enables subscribers to access up to 25 per cent of their contribution before exit, subject to defined conditions.

 

“This provision is intended to offer financial flexibility to subscribers for specific life events or emergencies, without compromising long-term retirement goals,” said the PFRDA annual report.