Key CPF Changes in 2025
By Shawn Lee
If you’ve only got a minute:
- The CPF monthly salary ceiling has been raised to S$7,400.
- The CPF Special Account (SA) will be closed for those aged 55 and above, from 19 January 2025.
- The Enhanced Retirement Sum (ERS) has been raised to four times the Basic Retirement Sum (BRS).
Several important changes to the Central Provident Fund (CPF) have taken place since the start of this year.
They are designed to boost retirement savings and provide additional support for senior citizens and platform workers.
Here are 9 key CPF changes you should know.
1. Increase in CPF monthly salary ceiling
To help middle-income Singaporeans save more for their retirement and keep pace with rising salaries, the CPF monthly salary ceiling will be raised from S$6,000 to S$8,000 from 2023 to 2026.
The increase will take place in 4 steps.
From 1st January 2025, the CPF monthly salary ceiling was raised to S$7,400 from S$6,800. The final increase will occur on 1st January 2026, bringing the monthly ceiling to S$8,000.
Read more: How the CPF salary ceiling changes affect you
2. Closure of CPF Special Account (SA) for aged 55 and above
From 19 January 2025, the Special Account (SA) was closed for CPF members aged 55 and above.
For affected members, their SA savings would be transferred to the Retirement Account (RA) up to their cohort’s Full Retirement Sum (FRS). These RA savings will continue to earn the long-term interest rate of at least 4% per annum (pa).
If you have already set aside your FRS, either fully in cash or through a combination of property and cash, any remaining SA savings will be transferred to your Ordinary Account (OA). These savings will be withdrawable and will earn the short-term interest rate of at least 2.5% pa.
Read more: Death of CPF Special Account – So what’s next? and What to do when your CPF SA is closed?
3. Changes to Retirement Sum figures and Raised Enhanced Retirement Sum (ERS)
From 2023 to 2027, the CPF retirement sums will increase by 3.5% annually to factor in inflation and a higher standard of living.
From 2025, the ERS has been raised to 4 times the Basic Retirement Sum (BRS) to provide CPF members with the option to top-up more to their RA to receive higher monthly payouts from age 65. The ERS was previously set at 3 times the BRS. The FRS remains at 2 times the BRS.
A CPF member on the CPF LIFE Standard Plan turning 55 in 2025 can receive monthly payouts of about S$3,300 from age 65 if they choose to top up to the raised ERS at age 55.
|
2025 |
RA at age 55 |
CPF LIFE monthly payout starting at age 65 |
CPF LIFE monthly payout starting at age 70 |
|
Basic Retirement Sum (BRS) |
S$106,500 |
S$840-S$900 |
S$1,120-S$1,210 |
|
Full Retirement Sum (FRS) |
S$213,000 |
S$1,590-S$1,710 |
S$2,120-S$2,290 |
|
Enhanced Retirement Sum (ERS) |
S$426,000 |
S$3,080-S$3,310 |
S$4,080-S$4,420 |
*Estimated CPF LIFE monthly payouts calculated with the Standard Plan, using the CPF LIFE Estimator.
4. Change in Basic Healthcare Sum (BHS)
The Basic Healthcare Sum (BHS) is the estimated savings you need in your CPF MediSave Account (MA) for your basic subsidised healthcare needs in old age. It is the maximum amount you can have in your MA.
For CPF members turning 65 in 2025, the cohort’s BHS is S$75,500 and it will remain fixed for the rest of their lives. For those who have turned 65 in 2024, the cohort BHS is S$71,500.
For CPF members below age 65, the BHS will be adjusted annually to keep pace with the expected growth in the use of MediSave balance by the elderly. This ensures that the BHS will stay relevant for each cohort when they reach retirement age.
5. Increased CPF contribution rates for senior workers
In 2019, the Government announced that CPF contribution rates will be raised gradually for CPF members aged 55 to 70. This will allow those aged between 55 and60 to have the same contribution rates as younger workers by 2030.
Total CPF contribution rates for senior workers aged above 55 to 65 will be increased by 1.5% starting from 1 January 2025. This includes a 0.5% increase from the employer’s share and 1% from the employee’s share.
This change helps senior workers in accumulating more savings in their CPF accounts.
|
Employee’s age (years) |
Total in 2024 (% of wage) |
Total |
By employer |
By employee |
|---|---|---|---|---|
|
|
|
(% of wage) |
(% of wage) |
(% of wage) |
|
≤55 years old |
37 |
37 |
17 |
20 |
|
>55 to 60 years old |
32.5 |
32.5 |
15.5 |
17 |
|
(+1.5) |
(+0.5) |
(+1) |
||
|
>60 to 65 years old |
22 |
23.5 |
12 |
11.5 |
|
(+1.5) |
(+0.5) |
(+1) |
||
|
>65 to 70 years old |
16.5 |
16.5 |
9 |
7.5 |
|
>70 years old |
12.5 |
12.5 |
7.5 |
5 |
6. Updates to Matched Retirement Savings Scheme (MRSS)
Launched in 2021, the MRSS helps senior Singapore Citizens (age 55-70) with lower retirement savings to save more for their retirement by matching cash top-ups made to their RA.
From 1 January 2025, the MRSS has been extended to those above age 70, allowing more Singaporeans to meet their retirement needs. The annual matching cap will also be increased from S$600 to S$2,000 with a lifetime matching cap of S$20,000.
Tax relief for cash top-ups that attract the MRSS matching grant will be removed as the matching grant is already a significant benefit.
7. Increased CPF Contributions for platform workers
Starting in 2025, CPF contribution rates for platform workers and platform operators will be gradually increased to match that for employees and employers.
With the CPF contributions from platform operators, platform workers will see an overall increase in their CPF savings. The CPF contribution rates for platform workers and platform operators will be gradually increased over 5 years, by up to 2.5%pa and up to 3.5%pa respectively.
Read more: What the new Platform Workers Bill means for you
8. Enhancements to Silver Support Scheme (SSS)
The SSS provides quarterly cash payments to seniors aged 65 and above who had low incomes during their working years and now have less in retirement.
Starting in 2025, these payments will be increased by 20% to strengthen support for eligible senior Singaporeans. The qualifying household monthly income per person threshold has also been raised from S$1,800 to S$2,300.
9. Enhancements to Workfare Income Supplement (WIS) scheme
From 2025, the qualifying income cap for the WIS will be raised from S$2,500 to S$3,000. This ensures that lower-wage workers continue to be supported even as their wages grow.
Workfare payouts have also increased. Lower-wage senior workers will qualify for a maximum annual payout of S$4,900, from S$4,200 currently.
Ready to start?
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Disclaimers and Important Notice
This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.
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