India’s pension assets under management (AUM) are projected to reach Rs 118 lakh crore by 2030, with the National Pension System (NPS) accounting for approximately 25% of this total, according to an IndoUS Tribune report.

The NPS private sector AUM has witnessed substantial annual growth, increasing by 26.8% over the last five years, from Rs 84,814 crore to Rs 2,78,102 crore.

This surge is anticipated to be driven by evolving Indian demographics and their impact on retirement planning.

India’s elderly population is expected to grow 2.5 times by 2050, coupled with an increasing post-retirement life expectancy averaging around 20 years, as per the report by DSP Pension Fund Managers.

Currently, India’s pension market remains under-penetrated, representing only 3% of the country’s GDP.

The retirement savings gap is predicted to widen annually by 10%, potentially reaching approximately $96 trillion by 2050.

Indian retail investors are increasingly shifting from traditional savings methods to market-linked investments, with a decline in reliance on cash and bank deposits from 62% to 44% over the past decade, the report stated.

New NPS registrations have grown significantly between fiscal years 2020 and 2024, with male subscribers rising by 65% and female subscribers by 119%.

NPS Vatsalya, introduced in September 2024, has been well-received, attracting over 86,000 subscribers.

Looking forward, the NPS private sector AUM is projected to surpass Rs 9,12,000 crore, with over 15 million subscribers within the next five years.

“We believe that India’s pension market is on the brink of rapid evolution, and with the right policies and increased awareness, it has the potential to unlock significant value for citizens. We are confident that our robust investment process will position us as a key player in this space,” said Rahul Bhagat, CEO, DSP Pension Fund Managers.

Key growth factors include government tax reforms, NPS inclusion in both old and new tax regimes, tax benefits for parents contributing to NPS Vatsalya, the adoption of private sector fund managers by government employees, increased NPS adoption among younger investors (20–30 age group), and the integration of technology and AI in fund management.