Have a medical emergency? You can soon access part of your NPS savings
New Delhi, Apr 9, 2026
Pension meets Healthcare: How you can use NPS funds for medical costs
For most people, pension savings are something you don’t touch until retirement. But what if you could use a part of that money when you actually need it the most—during a medical emergency?
That’s the idea behind a new initiative launched by the Pension Fund Regulatory and Development Authority, which is piloting the second phase of NPS Swasthya, a scheme that aims to combine retirement savings with healthcare funding.
Pension fund regulator PFRDA on Wednesday said it has launched the second "Proof of Concept (POC) of NPS Swasthya", an initiative intended to provide healthcare funding along with retirement planning.
According to a statement, PFRDA said the National Pension System (NPS) Swasthya is a multi-partner initiative structured to provide comprehensive financial and health security.
Why this matters for you
If you’re investing in the National Pension System (NPS), your money is typically locked in until retirement. While that ensures long-term savings, it also creates a problem:
What happens when you need money urgently for health expenses?
With healthcare costs in India projected to rise between 11.5% and 14% in 2026, much faster than inflation, this gap is becoming harder to ignore.
What is changing with NPS Swasthya
The new model allows you to:
Access up to 25% of your pension contributions
Use it specifically for medical expenses
This portion is called the “Net Eligible Balance”, and it can be accessed digitally when needed.
In simple terms:
Your retirement savings can now double up as a health emergency fund.
How you will actually use it
The system is designed to be app-based and seamless.
Subscribers will be able to:
Request funds through the MAven app
Access money quickly for hospital or medical expenses
Use a system integrated with NPS records
The backend is supported by multiple partners:
Medi Assist for technology and claims
CAMS for onboarding and KYC
Pension fund managers like Tata and Axis
Health insurance support from Aditya Birla Health Insurance
The Pension Fund Regulatory and Development Authority (PFRDA) serves as the regulatory authority. The Medi Assist Healthcare Services acts as the core technology partner, providing digital infrastructure whereas CAMS KRA supports subscriber onboarding and KYC enablement and Tata Pension Fund and Axis Pension Fund serve as the designated pension fund managers, the statement said.
It added that Aditya Birla Health Insurance provides the integrated top-up insurance cover, and Medi Assist TPA manages claims administration.
PFRDA in a statement added that this scheme comes at a time when the pension ecosystem is rapidly scaling with NPS and Atal Pension Yojana (APY) having a cumulative subscriber base of 9.64 crore and combined assets under management pegged at Rs 16.55 lakh crore as of 29 March 2026.
For you, this means:
Less paperwork
Faster access during emergencies
Why this is coming now
India’s pension ecosystem is growing rapidly:
9.64 crore subscribers across NPS and Atal Pension Yojana
Total assets of ₹16.55 lakh crore
But alongside this growth, a major concern is emerging:
Rising healthcare costs are threatening long-term savings
Many retirees end up dipping into their savings for medical needs, reducing their financial security later in life.
Earlier:
Pension = Locked savings for old age
Now:
Pension = Retirement + healthcare safety net
But there’s a catch
Access is limited to: 25% of your contributions
And using it early could reduce your final retirement corpus
So while it helps in emergencies, it still requires careful use.
[The Business Standard]