Top 5 Government and Private Pension Scheme for Senior Citizens in India 2023


6 min read

Updated on Sep 19, 2023

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

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Top 5 Government Pension Plans

1. National Pension Scheme (NPS) 

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)

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)

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)

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)

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

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

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

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

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

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

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

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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 5 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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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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