NPS gains traction as trusted investment choice: Max Life

Max Life Insurance today said the National Pension System (NPS) has gained traction as a trusted investment choice. In the fourth edition of its retirement survey – India Retirement Index Study (IRIS) -- Max Life said 90% respondents consider NPS as a safe and reliable product. IRIS reveals that urban India’s retirement preparedness has increased to 49 points compared with the previous edition of the survey.

NPS is the government’s contributory pension scheme regulated by the Pension Fund Regulatory and Development Authority. According to the survey, done in partnership with marketing and data analytics company KANTAR, NPS gains traction as nine out of ten users trust its safety and reliability.

IRIS 4.0 survey points out that awareness about NPS has surged, especially in Tier-II cities (78%), where NPS ownership now stands at an impressive 25%. “Both the East and South zones show robust awareness (74% and 72%, respectively), with East and West zone leading in ownership (26% and 22%, respectively) as well,” the survey says.

According to the survey, the key factors driving NPS adoption include attractive returns (57%), lifelong income (40%), and better tax saving option (36%). The survey also points out that despite this positive outlook, challenges such as handholding and lack of complete product understanding still limit broader adoption.

Apart from betterment in urban India’s retirement index, on the back of greater awareness and proactive steps in both health and financial planning, the survey reveals that working women scored higher than men on the retirement index. Also, IRIS 4.0 introduces two new segments – Double Income No Kids (DINKs) and Gig workers+. “DINKs align closely with the overall Indian population, with an index score of 49 points, indicating strong health and financial preparedness. In contrast, Gig workers score only 46 points, reflecting lower readiness across the cohort,” said the survey.

Speaking about the findings, Prashant Tripathy, CEO and Managing Director, Max Life said, "Preparing for retirement is a critical priority for the future of Indians, especially as life expectancy rises with advancements in healthcare, emphasizing the need for long-term financial planning. The IRIS 4.0 study reveals that although urban India's retirement index has improved with positive gains in the financial and health indices, one in three Indians still feel underprepared.”

The survey points out that 37% of the respondents have not yet started investing for retirement, while 57% worry that their retirement corpus will last less than a decade into their retirement planning. The sample size of IRIS 4.0 was 2077 spread across 28 cities including twelve Tier-II cities and ten Tier-II cities.