NPS Partial Withdrawal: Around 89 Per Cent Requests Settled In 2024-25, Housing On Top

The National Pension System (NPS) offers partial withdrawals for various reasons, of which the highest withdrawals have been made for housing needs in the financial year 2024-25. According to the Pension Fund Regulatory and Development Authority (PFRDA) annual report released this month, the highest number of withdrawals has been made for the construction of residential houses (1,72,625 requests), followed by higher education of children, including adopted children (30,051) and specified illnesses (29,268) in FY 2025-25.

Of the total withdrawal requests for house construction, 1,55,236 (90 per cent) were settled. For educational purposes, around 86 per cent of claims were settled, whereas for medical treatment for specified illnesses, around 93 per cent of withdrawal claims were settled during the year.

In FY2024-25, total partial withdrawal requests stood at 2.71 lakh (2,71,738), of which around 89 per cent (2,41,048) were settled. To put it in perspective, as of March 31, 2025, the total NPS subscribers numbered 839.91 lakh (83.99 million), while partial withdrawal requests during the year were just 2.71 lakh, only 0.32 per cent of subscribers.  

Here is the detail of partial withdrawal requests and their settlement in FY2024-25.

1. For the construction of a residential house

• Request Received - 1,72,625

• Settled - 1,55,236 (90 per cent)

• Amount involved in settlement - Rs 1,327.91 crore

2. Higher education of children, including a legally adopted child

• Request Received - 30,051

• Settled - 25,962 (86 per cent)

• Amount involved in settlement - Rs 204.31 crore

3. For the treatment of a specified illness

• Request Received - 29,268

• Settled - 27,174 (93 per cent)

• Amount involved in settlement – Rs 215.88 crore

4. For medical and incidental expenses due to disability/ incapacitation

• Request Received - 18,107

• Settled - 14,695 (81 per cent)

• Amount Involved In Settlement - Rs 103.98 crore

5. For marriage of children, including a legally adopted child

• Request Received - 14,494

• Settled - 12,742 (88 per cent)

• Amount Involved In Settlement - Rs 107.00 crore

6. For skill development or re-skilling or any other self-development activities

• Request Received - 6,133

• Settled - 4,296 (70 per cent)

• Amount Involved In Settlement - Rs 29.08 crore

7. For the establishment of own venture or start-up

• Request Received - 1,060

• Settled – 943 (89 per cent)

• Amount Involved In Settlement - Rs 5.74 crore

Note that these seven reasons for partial withdrawals have changed recently. The PFRDA, through a gazette notification dated December 15, 2025, implemented the changes. Effective from the gazette notification date, withdrawal for skill development and self-development activities and for starting one's own ventures is stopped.

Further, withdrawal for the construction of a residential house is permitted only once and if the subscriber does not own a house already. The specified list for treatment has also been abolished, and now, subscribers can withdraw funds for all medical treatments for themselves, their spouse, children, and parents.

While removing two of the previous withdrawal reasons, PFRDA has added one new reason to make NPS more relevant. Now, subscribers can withdraw funds from NPS to repay loans taken against their NPS balance.

NPS is a social security scheme available for all Indian citizens, including resident and non-resident Indians (NRIs), and people working in the organised as well as unorganised sectors. The scheme allows partial withdrawal of up to 25 per cent of the subscriber’s contribution four times throughout the investment period, with a gap of four years between each withdrawal.