Top Government and Private Pension Scheme for Senior Citizens 2024 in India

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Updated on Jan 31, 2024

Investing in pension plans is important for securing life after retirement. Without a constant source of income as a senior citizen’s monthly pension, elderly people may find it difficult to manage expenses to lead a comfortable life. 

There are numerous private as well as government pension plans offering annuity options for senior citizens that we are discussing in this post. Let’s take a look.

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What are the different types of monthly pension plans available for Senior Citizens?

While considering the best pension scheme for senior citizens, the choice would depend on various factors such as amount to be invested, risk tolerance, your particular need etc. Below are some options of pension plans that can be considered for senior citizens.

  • There are pension plans for senior citizens offered by the government
  • There are traditional annuity pension plans, and
  • There are ULIP retirement plans.
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Government Pension Plans with Monthly Security for Senior Citizens

The below table shows some of the popular government pension schemes for senior citizens:

Pension Scheme Age of Entry  Age of Maturity Policy Term Tax Benefits
National Pension Scheme (NPS) 18 – 70 years Min. 60 years Min. 3 years Available
Senior Citizens Savings Schemes (SCSS) 50 to 60 years Min 65 years Min. 5 years Available
Pradhan Mantri Vaya Vandana Yojana (PMVVY) Min. 60 years 70 years and above 10 years GST exemption
Atal Pension Yojana (APY) 18 – 40 years 60 years Min. 20 years Available
Employment Provident Fund (EPF) 18 years and above 58 years Min. 50 years Available (with certain restrictions)
Varishtha Pension Bima Yojana (VPBY) Min. 60 years and above 75 years Min. 15 years Available
Indira Gandhi National Old Age Pension Scheme (IGNOAPS) NA 60 years NA NA

Top 7 Government Pension Plans

1. National Pension Scheme (NPS):

NPS is a voluntary contribution scheme linked to the market that supports the investor in saving for retirement. This is a simple and flexible plan that serves efficiently to boost your retirement income. The scheme was introduced by the central government for individuals who want to get an income as a pension to manage their finances after retirement. NPS is available to all the citizens of India including overseas Indians between the age of 18 and 70 years.

Features of NPS:

  • Allows to withdraw 60% of the accumulated funds on maturity
  • The plan offers no upper investment limit
  • The policyholder must invest minimum 40% of income to buy an annuity policy for monthly regular income for entire life
  • Allow the investor to save on tax under section 80C and 80CCD (1B) of Income Tax Act

Also Know: National Pension Scheme

2. Atal Pension Yojana (APY):

The Atal Pension Plan was launched by the Indian government in the year 2015 to create a system of uniform social security for all Indians, especially the underprivileged and those working in the unorganized sector. Everyone with a bank account can open an APY account in the age group of 18 – 40 years. The plan encourages workers in the unorganized sector to save voluntarily for their retirement.

Features of APY:

  • This pension scheme serves best for people in the unorganized sector such as agricultural laborers, small & marginal farmers, daily wage laborers, etc.
  • The Government contributes 50% or Rs. 1000 (whichever is lesser) of the total contribution by the subscriber in the fund under this scheme for 5 years period from the start of the scheme
  • The monthly pension received is between INR 1000 to INR 5000 per month from 60 years onwards depending on the amount deposited

Also Know: Atal Pension Yojana (APY)

3. Senior Citizens Savings Scheme (SCSS):

The Senior Citizens Saving Scheme (SCSS) is another government-backed plan aimed at the elderly residents of India above the age of 60 years.  This is a retirement benefit plan offering tax benefits to the investor. Here the investor can invest a lump sum amount individually or as a joint account to receive a regular stream of income in their retirement age.

You may note that the maximum deposit amount under this scheme has been increased from INR 15 lakhs earlier to INR 30 lakhs in the 2023 budget.

Features of SCSS:

  • This Post Office monthly income scheme for senior citizens work as the best pension plan for senior citizens
  • The plan offers Single Life and Joint Life options
  • The plan also offers Income Tax exemptions
  • The quarterly benefits under this plan are deposited in the SCSS account

Know More: Senior Citizens Savings Scheme

4. Employee Pension Scheme (EPS):

The EPS or Employee Pension Scheme was initiated in 1995 to support organized sector employees to avail of pension after retirement. Eligible employees of the EPF or Employees Provident Fund scheme are eligible to avail of EPS. It is a scheme of social security administered by EPFO or Employees’ Provident Fund Organisation. However, you may note that the scheme benefits are offered to the employee only if they have served a minimum of 10 years of total service years.

Features of EPS:

  • The minimum monthly pension of INR 1000 is allowed under this plan
  • The plan converts all the premiums paid of the scheme into pension payouts
  • In case of death of the insured, the spouse receives the pension under this scheme
  • If case of remarriage of the spouse, the children of the employees receive the monthly pension until they turn 25 years

Read More: Employee Pension Scheme

5. Pradhan Mantri Vaya Vandana Yojana (PMVVY):

The PMVVY is another Pension Scheme offered exclusively for the elderly above the age of 60 years. INR 15 lakh is the maximum Investment limit under this scheme that a senior citizen can invest. To avail of the policy benefits, an investor can purchase the plan by paying a lump sum amount. The pensioner can choose between the pension amount or the Purchase Price. This is an insurance cum pension policy that serves as an alternative source of income for the elderly after retirement.

Features of PMVVY:

  • Allow the policyholder to make an investment on a yearly, half-yearly, quarterly, or monthly, basis
  • Allow life coverage throughout the policy duration
  • In the event of death of the pensioner, the nominees receive complete purchase price
  • The minimum and maximum monthly pension received under this govt. pension scheme for senior citizens include INR 1000 and INR 9250

6. Varishtha Pension Bima Yojana (VPBY)

VPBY is a senior citizen pension scheme aimed at serving citizens above the age of 60 years. The scheme offers income security to the aged with a guaranteed return. Under this plan, pensioners can avail the plan by paying a lump sum amount at the purchase price. The policy will allow the pensioner to avail of a pension on a monthly or annual basis. They may also choose to avail of the pension on a quarterly or semi-annually. The frequency of pension payment can be opted by the investor as per their convenience.

Features of VPBY

  • The scheme is available for citizens above the age of 60 years
  • The plan comes with a lock-in period of 15 years
  • Once the plan completes 3 years, the investor can avail of a loan facility of up to 75% of the investment
  • The policy can be canceled within 15 days of receiving the policy documents

7. Indira Gandhi National Old Age Pension Scheme (IGNOAPS)

IGNOAPS is a sub-scheme of the NSAP or National Social Assistance Program under which Indian citizens who are 60 years and above and are living below the poverty line are eligible to apply for the scheme. Under this scheme, a monthly pension of INR 200 is paid to the elderly for up to 79 years and INR 500 for people of 80 years and above.

Features of IGNOAPS

  • The scheme offers senior citizens in India a monthly pension
  • This is a non-contribution pension plan under which the beneficiary doesn’t have to contribute any amount to avail of the pension
  • Applicants to avail of this scheme have to be 60 years and above and living below the line of poverty

Traditional Annuity Plans with Monthly Security for Senior Citizens

The table below shows some best annuity pension plans by different insurers:

Plan Name  Entry Age  Maturity Age Policy Term Premium Payment Term Tax Benefits
SBI Saral Life Retirement Saver 18 to 65 years 40 to 70 years 40 years Regular or lump sum pay option Tax exemption available
Max Life Forever Young Pension Plan 30 to 65 years NA 20 years NA Tax exemption available
ABSLI Guaranteed Annuity Plus 45 to 90 years 46 to 90 years Whole life Single and limited pay (5,10 years) Tax exemption available
HDFC Life Pension Guaranteed Plan 30 to 85 years NA NA Single pay Tax exemption available
IndiaFirst Life Guaranteed Annuity Plan 40 to 80 years NA NA Single pay Tax exemption available
Tata AIA Life Insurance Guaranteed Monthly Income Plan 6 to 66 years 65 to 68 years 5/8/12 years 5/8/12 years Tax exemption available
ICICI Pru Guaranteed Pension Plan 30 to 100 years 31 years NA Single pay Tax exemption available

Top 5 Traditional Pension Plans

1. SBI Life Saral Retirement Saver:

The SBI Saral retirement saver is a plan that guarantees a retirement corpus to the investor to guarantee financial independence to the person. It is an individual plan in the non-linked and participating category. Being a pension product, it ensures a worry-free life after retirement in terms of financial needs.

Features of SBI Life Saral Retirement Saver:

  • The policyholder receives guaranteed bonuses under the plan in the initial 5 policy payment years
  • The scheme offers rider options for life coverage
  • Tax exemptions are also available
  • The plan offers reversionary bonuses and guaranteed vesting benefits

2. HDFC Life Pension Guaranteed Plan:

This is a single premium plan in the non-participating and non-linked category offering regular income as an annuity for a lifetime.  The plan comes with wide options of annuity to serve the needs of different People. You can avail of the plan based on single or joint life to get immediate or deferred annuity.

Features of HDFC Life Pension Guaranteed Plan:

  • The maximum entry age is 85 years for this plan
  • The plan needs the policyholder to pay a single premium payment to guarantee a monthly income for life
  • The plan offers two options – deferred annuity or immediate annuity options
  • The policyholder can purchase the plan for spouse

3. Max Life Forever Young Pension Plan:

Here is another pension plan that guarantees a stress-free income for an investor and his/her spouse. This is a unit-linked individual pension plan in the non-participating category that supports the creation of a corpus for retirement while safeguarding the insured from the financial turmoil of the equity market. It also offers added annuity benefits to protect the spouse and family against unforeseen occurrences.

Features of Max Life Forever Young Pension Plan:

  • The plan offers fund options such as Pension Maximiser and Pension Preserver Option
  • Under the Pension Maximiser Option, the policyholder can invest in a hybrid fund including debt instruments and equities, which allow moderate risks. On the other hand, the Pension Preserver Option allow the investor to invest in a hybrid fund with major investments done in debt instruments with low risks
  • The plan is available to people between 60-65 years of age and it comes with annuity benefits

4. Tata AIA Life Insurance Guaranteed Monthly Income Plan:

This is another retirement plan that ensures regular income to the investor and family with guaranteed monthly pay. The plan supports the investor in everyday expenses along with offering assured life cover. It comes with a flexible payment option of monthly, quarterly, semi-annual, and annual.

Features of Tata AIA Life Insurance Guaranteed Monthly Income Plan:

  • It offers a monthly payout for a term that is twice the tenure of the policy term
  • You can pay Large Premium Booster amounts to increase monthly pension amount
  • Tax benefits are available
  • There is flexibility in terms of payment such as yearly/ bi-yearly/ quarterly/monthly
  • The pension plan also offers rider options for critical illnesses etc.

5. IndiaFirst Life Guaranteed Annuity Plan:

This annuity policy is crafted to ensure regular income to the insured throughout life. This plan helps in coping with the healthcare costs of investors and keeping abreast with inflation even during the retirement period. The plan offers 12 annuity options to choose from to get assured regular income.

Features of IndiaFirst Life Guaranteed Annuity Plan:

  • The plan offers the option of 12 annuity options to customers
  • Life Annuity, Escalating life annuity, Survivor annuity in Joint Life, and Deferred Annuity are the options that allow Return of Purchase (ROP) facility under this scheme
  • The plan protects your loved ones with annuity benefits
  • The plan offers assured monthly income for a pre-decided period

6. ABSLI Guaranteed Annuity Plus

Another good pension plan for the elderly, the Aditya Birla Sun Life Insurance Guaranteed Annuity Plan is available with guaranteed income for a lifetime of the insured and the spouse. So, until the investor or his/her spouse is alive the plan will regularly pay pension. This plan allows guaranteed income for life to let you enjoy the retired life of your dreams.

Features of the ABSLI Pension Plan

  • It allows 10 payout options to choose from
  • You have the option to choose either a fixed monthly income for life or enhance the sum by 3-5% after a time period
  • The insured has to pay the amount as a lump sum while purchasing the plan
  • The minimum sum required to purchase the plan is INR 1.5 Lakhs

7. ICICI Pru Guaranteed Pension Plan

With ICICI Pru Guaranteed Pension Plan, you can secure your life post-retirement with an assured and regular income.  All you need is to invest once and you can choose to start receiving the regular income on a monthly, quarterly, or even six-month or yearly basis. This is an insurance cum pension plan.

Features of ICICI Pru Guaranteed Pension Plan

  • The plan offers a selection of 10 annuity options to choose from
  • It also offers the option to enhance your monthly income via a top-up facility
  • With the immediate annuity option, the investor can receive a monthly income immediately after the purchase of the plan
  • The pension amount continues to come regularly till you are alive

Top General Insurance Companies

To Sum Up

The increase in the population of senior citizens in India makes it important for people to take a holistic approach to secure their financial life after retirement with senior citizen pension schemes. There are several good pension plans offered by both government and private insurance companies to fulfil the needs of the senior citizens. Further, the government of India offer some free pension for senior citizens in India, especially for the poor and economically deprived old people, which can be availed by the needy.

It is necessary for every individual to subscribe to at least one pension plan to make sure that the flow of money keep coming after their retirement.

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FAQs: Top Government & Private Pension Scheme for Senior Citizens

Are there any government pension plans for senior citizens in India?

Yes, there are several pension plans for senior citizens offered by the government of India as mentioned below:

1. National Pension Scheme (NPS)
2. Atal Pension Yojana (APY)
3. Senior Citizens Savings Scheme (SCSS)
4. Employees Provident Fund (EPF)
5. PM Vaya Vandana Yojana (PMVVY)
6. Indira Gandhi National Old Age Pension Scheme (IGNOAPS) 
7. Varishtha Pension Bima Yojana (VPBY)

What is the latest pension scheme for senior citizens introduced by the government of India?

The PMVVY or the Pradhan Mantri Vaya Vandana Yojana is the new pension scheme introduced on 4th May 2017 by the government for senior citizens in India. The scheme was extended till 31st March 2023 for people above 60 years. 

Which is the best government pension scheme?

Atal Pension Yojana (APY) is one of the best government schemes for people in the unorganized sector. Under this plan, the beneficiary as well as the Government of India pay a share of the premium. NPS and IGNOAPS are other such good pension plans offered by the government. 

What are the documents required for applying for a pension plan?

Here are the necessary documents to apply for a pension plan:

# Birth certificate
# Bank account details
# Papers of ITR 
# ID proof
# KYC documents

Is a pension better than savings?

Yes, a pension scheme for senior citizens is better than savings. That is because pension plans allow financial stability for old age. Savings plans offer low returns as compared to pension plans, which help in building a corpus with long-term investment.

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Mar 15, 2023
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