Highest NPS Partial Withdrawal Requests Were for Residential Housing in FY25

In the fiscal year 2024–25, housing-related needs emerged as the leading cause for partial withdrawals under the National Pension System (NPS), with ₹1,327.91 crore withdrawn, according to the Pension Fund Regulatory and Development Authority (PFRDA). 

Housing Needs Dominate NPS Withdrawals 

The purchase or construction of residential houses accounted for the highest number of withdrawal requests, totalling 1,72,625, with 1,55,236 requests settled. This resulted in a withdrawal amount of ₹1,327.91 crore. The PFRDA's annual report, released this month, highlighted these figures. 

Recent changes in NPS rules, as per a gazetted notification, have retained the provision for partial withdrawal for housing, provided the subscriber does not own another house except for ancestral property. This withdrawal is now explicitly a one-time event. 

Expanded Scope for Medical Withdrawals 

Withdrawals for medical needs have seen a significant expansion. The previous restriction to a list of critical illnesses has been replaced by a broader allowance for medical treatment or hospitalisation of the subscriber, spouse, children, or parents, without a specific disease list. 

Read More: EPFO to Work on Returning Unclaimed Money from Inactive Accounts! 

Other Notable Withdrawal Reasons 

Withdrawals for children's higher education, including legally adopted children, saw 30,051 requests, with 25,962 settled, amounting to ₹204.31 crore. For treatment of specified illnesses, 29,268 requests were made, with 27,174 cases settled, involving ₹215.88 crore. 

Changes in Withdrawal Rules 

PFRDA has removed purposes such as skill development, re-skilling, or self-development activities, and establishing a startup from the eligible list for partial withdrawals. These categories saw lower volumes, with 6,133 requests and 4,296 settlements, amounting to ₹29.08 crore. 

Conclusion 

In FY25, a total of 2,71,738 partial withdrawal requests were reported under the NPS, with 2,41,048 settled, amounting to ₹1,993.89 crore. The provision for partial withdrawal under the NPS allows subscribers to access up to 25% of their contributions before exit, offering financial flexibility for specific life events or emergencies. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.