India launches pension system for all ages, infancy to 70 

NPS Vatsalya allows accounts to be opened for children.

India’s recent launch of the National Pension System (NPS) Vatsalya aims to expand pension coverage to a broader demographic, allowing individuals from infancy to 70 years old to participate. 

With its flexibility and portability, NPS Vatsalya allows accounts opened for children to be seamlessly integrated into workplace pensions as they enter the workforce.

The flexibility of the NPS remains a key feature, with subscribers having control over their contributions, pension fund choices, and asset allocations. 

NPS now boasts over 7.82 crore subscribers (NPS and APY combined), and assets under management (AUM) have surpassed ₹13.4 lakh crore. 

The scheme has seen notable uptake across government and private sector employees, with 94 lakh subscribers from government employment and 60 lakh from the private sector. 

The NPS Vatsalya’s introduction emphasises the growing need for long-term financial stability in an ageing population. 

As India’s population over 60 years is expected to rise to 20.8% by 2050, the pension framework is designed to help mitigate the financial risks associated with longer lifespans and increasing healthcare costs. 

The scheme also promotes the power of compounding, allowing early contributions to grow substantially over time, ensuring a robust pension post-retirement.

With competitive returns—14.5% for equity schemes, 9.1% for corporate bonds, and 8.9% for government securities—NPS continues to be a financially sound option. 

Moreover, its tax benefits further enhance its attractiveness. The scheme offers a deduction of up to 14% of salary for employer contributions under the new tax regime, providing incentives for both employers and employees to invest in their future.