More and more people in the country are starting to realize the importance of retirement planning. This is evident from projections that India’s pension assets under management could hit Rs 118 lakh crore by 2030, with the National Pension System (NPS) potentially making up about 25 percent of that. This info comes from a recent report.
There’s been a huge surge in the AUM for NPS in the private sector, which has skyrocketed by 227 percent over the past five years, jumping from Rs 84,814 crore to Rs 2,78,102 crore. According to the DSP Pension and Fund Managers report, the elderly population in India is expected to grow 2.5 times by 2050, and life expectancy after retirement is projected to increase by an average of 20 years.
Right now, India’s pension market is relatively small, only representing 3 percent of GDP. The retirement savings gap is anticipated to widen by 10 percent each year, possibly reaching around $96 trillion by 2050. The report highlights that Indian retail investors are shifting away from traditional savings methods and leaning more towards market-linked investments.
The reliance on cash and bank deposits has dropped from 62 percent to 44 percent over the last decade, indicating this shift. There’s also been a notable rise in new NPS registrations from FY 2020 to 2024, with male subscribers up by 65 percent and female subscribers soaring by 119 percent.
NPS Vatsalya, launched by the government in September 2024, has been a hit, drawing in more than 86,000 subscribers. The report also mentioned that the assets under management (AUM) for the NPS private sector could surpass Rs 9,12,000 crore, with over 1.5 crore subscribers expected in the next five years.
Rahul Bhagat, CEO of DSP Pension Fund Managers, commented, “We see India’s pension market growing quickly, and with the right policies and more awareness, it can create a lot of value for the people.”