India’s pension system has expanded steadily over the past decade, but overall coverage remains limited when measured against the size of the country’s vast workforce, the Economic Survey 2025-26 has said. While participation in formal retirement savings schemes is rising, the Survey flags high informality, irregular incomes and low awareness as the biggest structural constraints preventing broad-based pension inclusion, especially among low-income and rural households.

According to the Survey, the dominance of informal employment continues to shape the contours of India’s pension challenge. A large share of workers operate outside stable, salaried arrangements, making it difficult for them to commit to long-term, locked-in pension products, even when contribution amounts are modest. Volatile cash flows and competing short-term financial needs often take precedence over retirement planning, limiting the reach of contributory pension schemes.

NPS, UPS, EPF

Despite these constraints, the Survey points to a progressively evolving, multi-tier pension architecture that seeks to cater to diverse segments of the workforce. India’s pension landscape is anchored by the market-linked National Pension System (NPS) and the government-backed Unified Pension Scheme (UPS), launched in 2025. These are complemented by the Employees’ Provident Fund (EPF) for organised sector workers and the Atal Pension Yojana (APY), which targets low-income and informal workers with assured pension benefits.

The growth trajectory of the NPS stands out as a key indicator of increasing formalisation of retirement savings. As of December 31, 2025, the NPS had 211.7 lakh subscribers, with assets under management of about ₹16.1 lakh crore. Over the decade from FY15 to FY25, the number of subscribers grew at a compound annual growth rate (CAGR) of 9.5%, while assets under management expanded at a much faster CAGR of 37.3%. The Survey attributes this sharp rise in assets to higher participation, longer contribution horizons and growing acceptance of market-linked retirement products.

NPS e-Shramik

At the same time, policymakers are increasingly focusing on segments that have traditionally remained outside the pension net. The Survey highlights targeted initiatives such as the NPS e-Shramik model for platform and gig workers, which aims to integrate retirement savings into digital work interfaces. Partnerships with farmer-producer organisations, MSMEs and self-help groups are also being leveraged to extend pension coverage to agricultural workers and those in the unorganised sector.

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