Mumbai, February, 2025.
DSP Pension Fund Managers projects a substantial growth in India’s pension assets under management (AUM), estimating a total of ₹118 trillion by 2030, with the National Pension System (NPS) expected to constitute approximately 25% of this total. This surge is anticipated to be fueled by evolving Indian demographics and their subsequent effects.
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. 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.
The NPS private sector AUM has experienced substantial annual growth, increasing by 26.8% over the last five years, from ₹84,814 crore to ₹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.
Looking ahead, the NPS private sector AUM is projected to exceed ₹9,12,000 crore with over 15 million subscribers within the next five years. 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.
“We believe that India’s pension market is at the cusp of evolving rapidly and with the right policies and increased awareness, it has the potential to unlock significant value for its citizens. We are very positive that our robust investment process will help us to be a significant player in this space. We expect ourselves to be among the top 5 players in the industry within the next 5 years. Our projections underscore the importance of long-term retirement planning and NPS’s role in securing financial futures,” said Rahul Bhagat, CEO, DSP Pension Fund Managers.
