The National Pension System (NPS) has seen major withdrawal rule changes after the Pension Fund Regulatory and Development Authority ( PFRDA) revised the exit and withdrawal norms, late last year.

The new rules, effective into 2026, give subscribers more flexibilityin terms of how and when they can withdraw their savings.

Here's a look at the new rules on how NPS withdrawals work before retirement and after retirement:

NPS withdrawals after retirement (normal exit)

Individuals working in the government sector:

• The exit age has been increases from 75 to 85, i.e. they can remain invested till 85. But can always exit earlier.
• Subscribers can withdraw up to 60% of their accumulated pension wealth (APW) at exit (withdrawal can be taken either as a lump sum or SLW), while the remaining 40% must be used to buy an annuity. This rule is same as earlier.

Individuals working in the corporate sector:

• The minimum 5-year (lock-in) period has been removed.
• The vesting period, earlier fixed until the age of 60, has now been shortened to 15 years or until age 60-whichever is earlier.
• Upon normal exit, corporate sector employees can withdraw upto 80% amount as a lump sum and use at least 20 per cent of the APW to buy an annuity. Earlier, they could only witdraw 60% of APW as lump sum

Corpus based withdrawal:

• If the APW is under ₹8 lakh, the subscriber can withdraw the entire amount in a lump sum upon normal exit.
• In case, if the APW is between ₹8 lakh and ₹12 lakh, he/she has the option to withdraw up to ₹6 lakh as a lump sum, and the remaining amount as systematic unit redemption (SUR) for at least six years or for an annuity.
• If corpus is above R12 lakh, the general 80/20 rule applies