Singapore’s Central Provident Fund (CPF) system is undergoing key reforms in 2025 that are set to impact retirement planning for workers, employers, and senior citizens alike.
The government has announced changes to contribution rates, retirement and re-employment ages, as well as CPF payouts all part of an effort to ensure long-term financial security for an ageing population and a changing workforce.
Raising the Retirement and Re-employment Ages
Starting July 1, 2025, Singapore’s retirement age will be raised from 63 to 64, while the re-employment age will rise from 68 to 69. These adjustments are in line with the government’s long-term plan to gradually raise the retirement age to 65 and re-employment age to 70 by 2030. These changes aim to enable older workers to remain in the workforce longer, stay financially independent, and continue contributing to their CPF savings.
CPF Contribution Rates for Older Workers Increasing
A significant aspect of the CPF changes in 2025 is the increase in CPF contribution rates for workers aged between 55 and 65. From January 1, 2025, employers and employees will see an additional 1.5 percentage point increase in total CPF contributions for this age group.
The enhanced contributions are designed to boost retirement savings for older workers and narrow the gap in CPF accumulation between younger and older employees.
Changes to Monthly Payouts and CPF LIFE
CPF payouts under the Retirement Sum Scheme and CPF LIFE are also being adjusted. Seniors who are receiving their monthly payouts will see a slight increase due to higher CPF interest accruals, which will benefit those with smaller CPF balances.
CPF LIFE, the national annuity scheme, continues to evolve, with better communication and planning tools introduced to help Singaporeans choose between Standard, Basic, and Escalating plans depending on their needs.
Higher CPF Salary Ceiling for Stronger Savings
The CPF monthly salary ceiling will also be raised in stages, and by 2026, it will increase from $6,000 to $8,000. The first phase in 2025 will see the cap lifted to $7,000.
This change means more CPF contributions will be made on higher portions of income, helping middle- and higher-income earners save more toward retirement, housing, and healthcare needs.
Support for Low-Income and Older Workers
To cushion the transition, the government is enhancing the Workfare Income Supplement and Senior Employment Credit schemes to support employers who hire older workers.
These programmes will ensure that the CPF contribution increases do not become a burden for businesses or lead to reduced job opportunities for seniors.
Looking Toward a More Sustainable CPF System
These changes reflect Singapore’s proactive approach to future-proofing its CPF system. By raising retirement and re-employment ages, increasing contributions for older workers, and adjusting CPF policies to better match rising costs of living, the 2025 reforms aim to ensure a more equitable and sustainable retirement framework for all Singaporeans.