The National Pension System (NPS) has undergone significant changes in its exit and withdrawal rules, effective December 15, 2025, according to the PFRDA (Exits and Withdrawals under the National Pension System) (Amendment) Regulations, 2025. These revisions, the most substantial in a decade, aim to provide subscribers with greater flexibility, higher tax-free lump-sum amounts, and smarter options for balancing immediate liquidity with long-term pension security. Here are six key changes you need to know:

1. Increased Lump-Sum Withdrawal Limits

The new regulations significantly increase the amount subscribers can withdraw as a lump sum. If your total NPS corpus is ₹8 lakh or less, you can now withdraw the entire amount without mandatorily purchasing an annuity. For corpuses between ₹8 lakh and ₹12 lakh, you can withdraw up to ₹6 lakh as a lump sum.

2. Deferral of Exit Until Age 85

Subscribers are no longer obligated to exit the NPS or purchase an annuity at age 60. You can now defer your exit decision until the age of 85, allowing your corpus to potentially grow further.

3. Systematic Withdrawal Option

The updated rules introduce a Systematic Lump Sum Withdrawal (SLW) or Systematic Unit Redemption (SUR) option. This allows you to receive the non-lump-sum portion of your corpus as regular payouts over a specified period, serving as a bridge before purchasing an annuity.

4. Relaxed Annuity Purchase Rules for Non-Government Subscribers

For non-government NPS subscribers, the mandatory annuity purchase has been reduced to 20% of the corpus exceeding ₹12 lakh. This means they can withdraw up to 80% as a lump sum. To be eligible for this, subscribers should have completed a minimum of 15 years under NPS or should have completed 60 years of age.

5. Expanded Partial Withdrawal Options

The new partial withdrawal rules offer more reasons and greater flexibility. Subscribers can now make partial withdrawals up to four times before age 60 (with a five-year gap between each withdrawal) and an unlimited number of times after 60 (with a three-year gap).

Reasons for withdrawal have also been expanded beyond the conventional education, marriage and home purchase to include: * Settling a loan taken against the NPS corpus from a regulated lender * Funding medical treatment for self, spouse, children or dependent parents * Financing skill development, a startup, or home improvement.

You can withdraw up to 25% of your own contributions, excluding employer contributions.

6. Streamlined Rules for Special Cases

The amended regulations include clearer and more compassionate provisions for missing subscribers and those renouncing Indian citizenship. In the event of a subscriber's death, the regulations ensure financial protection for family members and nominees, with options for annuity or lump-sum payouts.

These changes collectively represent a significant shift towards greater flexibility and control for NPS subscribers, empowering them to make informed decisions about their retirement savings.