The National Pension System (NPS), which currently commands assets under management (AUM) of around Rs 14 lakh crore, is expected to more than double the AUM at around Rs 29.5 lakh crore in the next 5 years, according to a report.
India’s pension assets under management (AUM) are estimated at Rs 118 lakh crore by 2030, with the NPS expected to constitute approximately 25% of this total, according to the report by DSP Pension Fund Managers.
This surge is anticipated to be fueled by evolving Indian demographics and their subsequent effects, the report said.
NPS private sector AUM stands at Rs 2.78 lakh crore in 2025
The NPS private sector AUM has experienced substantial annual growth, increasing by 26.8% over the last 5 years, from Rs 84,814 crore to Rs 2,78,102 crore.
New registrations have seen a significant boost between fiscal years 2020 and 2024, with male subscribers increasing by 65% and female subscribers by 119%. NPS Vatsalya, introduced in September 2024, has been well-received, attracting over 86,000 subscribers.
Also read: Unified Pension Scheme roll-out from April 1: How it differs from NPS and old pension scheme
NPS private sector AUM to jump three-fold to over Rs 9 lakh crore in 5 years
Looking ahead, the NPS private sector AUM is projected to exceed Rs 9,12,000 crore with over 15 million subscribers within the next five years, the report suggests.
“Key growth drivers include government tax reforms, the inclusion of NPS in both old and new tax regimes, tax benefits for parents contributing to NPS Vatshalya, the adoption of private sector fund managers among government employees, increased NPS uptake among younger generations (20–30 age group), and the integration of technology and AI in fund management,” it said.
India’s Pension Market Outlook
India’s elderly population is projected to increase 2.5 times by 2050, accompanied by a rising life expectancy rate post-retirement, averaging around 20 years, says DSP Pension Fund Managers. “Currently, India’s pension market is significantly under-penetrated, representing only 3% of the country’s GDP. The retirement savings gap is expected to widen annually by 10%, potentially reaching approximately $96 trillion by 2050. Indian retail investors are increasingly transitioning from traditional savings methods to market-linked investments, demonstrated by a decline in reliance on cash and bank deposits from 62% to 44% over the past decade.”
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