NPS AUM Set To Double, Expected To Reach Rs 29.5 Lakh Crore In 5 Years

The National Pension System (NPS) is poised for significant growth, with assets under management (AUM) expected to more than double from Rs 14 lakh crore to Rs 29.5 lakh crore within the next five years, according to a report by DSP Pension Fund Managers. This growth is driven by shifting demographics and increasing participation in the system.

India’s total pension AUM is projected to reach Rs 118 lakh crore by 2030, with the NPS accounting for around 25% of that total. This surge in pension assets is attributed to the evolving demographics of India, which are expected to significantly influence the pension landscape in the coming years.

Private Sector AUM Sees Substantial Growth

The private sector’s share of NPS AUM has already seen impressive growth, increasing by 26.8% over the last five years. From Rs 84,814 crore in 2020, the NPS private sector AUM stands at Rs 2.78 lakh crore in 2025, showing robust performance.

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Moreover, new registrations have surged during fiscal years 2020-2024, with male subscribers growing by 65% and female subscribers by 119%. The introduction of NPS Vatsalya in September 2024 further bolstered growth, attracting over 86,000 new subscribers.

Private Sector AUM Expected To Triple In 5 Years

Looking ahead, the NPS private sector AUM is projected to grow three-fold, surpassing Rs 9 lakh crore and attracting over 15 million subscribers within the next five years. This growth is expected to be fueled by a combination of favorable government tax reforms, the inclusion of NPS in both old and new tax regimes, tax benefits for parents contributing to NPS Vatsalya, and greater adoption of private sector fund managers among government employees.

Additionally, younger generations (ages 20-30) are increasingly embracing NPS, supported by the integration of technology and artificial intelligence in fund management.

India’s Pension Market: Potential For Rapid Growth

India’s elderly population is expected to increase 2.5 times by 2050, with life expectancy post-retirement averaging around 20 years. However, the country’s pension market remains under-penetrated, accounting for only 3% of the GDP. The retirement savings gap is projected to widen by 10% annually, potentially reaching $96 trillion by 2050.

As more retail investors shift from traditional savings methods to market-linked investments, India’s pension market is expected to undergo rapid transformation. The reliance on cash and bank deposits has already declined from 62% to 44% over the past decade.

Optimism for The Future Of India’s Pension Market

“We believe that India’s pension market is on the brink of significant growth. With the right policies and increased awareness, it has the potential to unlock tremendous value for its citizens,” said Rahul Bhagat, CEO of DSP Pension Fund Managers. “We are confident that our investment approach will help us become one of the top five players in the industry over the next five years. Our projections highlight the importance of long-term retirement planning and the crucial role NPS will play in securing financial futures for millions of Indians.”