As of August 2026, NPS has 22.9 million subscribers and assets under management (AUM) of ₹17.73 trillion. Yet, even as our economy moves towards becoming the world’s third-largest, retirement preparedness presents a different picture. India is ageing faster than many people are financially adapting. Life expectancy at birth is 72 years, compared with 58 years in 1990.
The population aged 60 and older is projected to reach 347 million by 2050, up from 149 million in 2022. Retirement planning, therefore, cannot remain confined to salaried employees. It applies equally to gig and platform workers, entrepreneurs, self-employed professionals and the unorganised sector.
What began as a reform for government employees has grown into a national pension movement. Today, NPS is available to eligible citizens across employment categories, including freelancers, gig and platform workers and those in the unorganised sector. A doctor with an independent practice, a small entrepreneur or a consultant between corporate roles can open an NPS account and contribute in accordance with their circumstances. The Atal Pension Yojana (APY) provides an assured minimum pension to eligible subscribers, with a particular focus on workers in the unorganised sector. As on August 9, NPS and APY together served approximately 101.3 million subscribers and had a combined AUM of around ₹18.32 trillion.
The task now is to ensure that these schemes reach every Indian who needs them.
Bringing sustainability into retirement planning with NPS accumulating a retirement corpus is only half the challenge. Converting that corpus into an income stream capable of supporting 20 to 30 years of retirement, while accounting for inflation, health care costs and market uncertainty is the harder and less-discussed part. The risk of outliving one’s savings, often called the longevity risk, is real and growing.
For many households, immediate consumption takes priority over long-term investment. This behavioural challenge stems from economic uncertainty, limited financial awareness and the historical absence of reliable savings instruments for large sections of the population. Retirement saving must be treated as a current financial priority rather than something to be deferred until later in life. NPS supports this shift through tax benefits on eligible contributions under applicable Income Tax provisions. The availability and extent of these deductions depend on the source of the contribution, the tax regime selected and the prescribed statutory limits.
Recent changes to the exit framework recognise the importance of flexibility. At normal exit, the mandatory annuity requirement for non-government NPS subscribers has been reduced to 20 per cent, allowing up to 80 per cent of the corpus to be withdrawn as a lump sum or managed through the newly introduced Retirement Income Scheme. Together, these options allow a subscriber to build a layered retirement income plan — a guaranteed annuity floor for essential expenses, a systematic drawdown for day-to-day spending, and a liquid reserve for health care and emergencies — and make NPS a complete retirement instrument.
The shift from viewing retirement as a single event to understanding it as a financial journey lasting 20 to 30 years is one that policy and individual behaviour must make together. India’s wealth story is being written in real time across its equity markets, its startup ecosystem and the aspirations of a young and growing workforce. But wealth creation without a retirement chapter is incomplete. The time to write that chapter is not at 60. It is now.
The writers are chairman, Pension Fund Regulatory and Development Authority, and chairman & group CEO, PB Fintech. This column was edited for space
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