Best Pension Scheme in India

What is the Pension Scheme in India?

A pension scheme in India is a financial plan that helps individuals save and invest money during their working years, so they receive a steady income after retirement. It ensures that you have financial security when your regular salary stops.

These schemes are offered by the government, insurance companies, and financial institutions. You can either pay a lump sum or invest regularly over time. After retirement, the scheme gives you monthly or yearly payments, like a salary, to help you manage your daily expenses.

Benefits of the Best Pension Scheme in India

Here are the benefits of buying the best pension scheme in India:

• Regular Income After Retirement: Pension schemes give you a fixed amount regularly after you retire, just like a monthly salary.
• Helps Manage Daily Expenses: They help cover your basic needs and daily costs when you no longer have a job income.
• Financial Support in Emergencies: You get money when needed, which is useful during medical or unexpected expenses.
• Peace of Mind in Old Age: Knowing you have a steady income gives you mental comfort and reduces financial stress.
• Tax Benefits: Many pension plans offer tax savings under sections like 80C, helping you save more.
• Safe Way to Save Money: Your money is invested safely, growing slowly over time until you retire.
• Flexible Options for Everyone: You can choose a plan based on your age, income, and how much you want to invest.

List of the Best Pension Plans in India 2025

Here is the list of the best pension plans in India 2025:

1. LIC New Jeevan Shanti Plan

LIC New Jeevan Shanti is a single-premium pension plan that gives you the option to receive a guaranteed regular income after a waiting period. You can choose to receive the pension for just yourself (single life) or for both you and your spouse (joint life). The plan is available both online and offline.

Key Features of this pension plan:

• Single Premium Payment: Make a one-time premium payment at the start of the policy.
• Annuity Options: Choose between Single Life or Joint Life annuity options.
• Guaranteed Pension: Guaranteed pension amount after the deferment period.
• Flexible Payout Modes: Pension can be received monthly, quarterly, half-yearly, or yearly.
• Death Benefit Options: Option to receive the death benefit as a lump sum, in installments, or through annuity.
• High Death Benefit: The death benefit is higher of the following two amounts:

1. Purchase Price + Additional Death Benefit – Total Annuity Paid

2. Or, 105% of the Purchase Price

• Loan Facility: A loan facility is available after 3 months of buying the policy.
• Guaranteed Returns Only: No bonuses or profit sharing, but all benefits are fixed and guaranteed.
• Purchase Options: You can purchase it online via the LIC website or offline through agents.

2. HDFC Life Click 2 Retire Plan

HDFC Life Click 2 Retire is an online unit-linked pension plan designed to help you build a secure retirement fund. It offers market-linked returns along with a guaranteed vesting benefit. The plan is flexible, low-cost, and suitable for early starters.

Key Features of HDFC Life Click 2 Retire Plan:

• Plan Variants: Two plan options available: with or without Waiver of Premium.
• Long-Term Life Cover: Life cover continues till the age of 99.
• Flexible Investment Choices: You can choose from four investment strategies and seventeen fund options.
• Loyalty Additions: You can get extra benefits every year from the 5th to the 25th policy year.
• Partial Withdrawals: You can make withdrawals after the 5th policy year when needed.
• Premium Flexibility: Option to reduce your regular or limited premium payments.
• Retired Life Income Option: Choose to receive regular income during your retirement years.
• Multiple Payment Modes: Pay premiums yearly, half-yearly, quarterly, or monthly as per your convenience.

3. ICICI Pru Easy Retirement Plan

ICICI Pru Easy Retirement SP is a unit-linked pension plan that offers the growth potential of equity investments along with the safety of a capital guarantee. With a one-time premium, it helps you build your retirement corpus and enjoy regular income after retirement. The plan is ideal if you want market-linked returns with protection for your savings.

Key Features of this pension scheme in India:

• Flexible Premium Payment: Pay only once or choose to pay premiums monthly, half-yearly, or yearly.
• Regular Pension After Retirement: Enjoy a steady income after retirement through a guaranteed pension.
• Top-Up Option: Invest extra funds anytime to grow your retirement savings.
• Annuity Choices at Retirement: Select from multiple annuity options when your plan matures.
• Tax Benefits: Premiums paid are eligible for tax deductions, helping you save on taxes.
• Tax-Free Lump Sum Withdrawal: Withdraw up to one-third of your fund value at retirement as a tax-free lump sum.
• Postpone Vesting Date: If you are under 55, you can delay the start of your pension multiple times.
• Secure Death Benefit: In case of your death, your nominee will receive 105% of the total premiums paid.

Note: Vesting Period refers to the time after which a policyholder starts receiving pension or retirement benefits.

4. Tata AIA Fortune Guarantee Plus

Tata AIA Life Insurance Fortune Guarantee Plus is a non-linked, non-participating life insurance savings plan that provides your family with financial protection and offers a guaranteed regular income. It also returns the total premiums paid at the end of the income period, helping you meet future needs while protecting your loved ones.

Key Features:

• Plan Options: Choose between Regular Income or Regular Income with inbuilt Critical Illness benefit.
• Guaranteed Income: Get guaranteed regular income for 20 to 45 years.
• Return of Premium: You will get back all the premiums you paid at the end of the income period, even if the insured person is not alive.
• Flexible Income Payout: Option to receive income monthly or annually, as per your preference.
• Customizable Premium Payment: Flexible premium payment terms to suit your needs.
• Additional Protection: Improve your plan with optional riders for added protection.
• Tax Benefits: Enjoy tax savings as per the current income tax laws.
• Death Benefit: In case of death during the policy term, the nominee gets the highest of:

1. 1.25x Single Premium or 10x Annualised Premium

2. 105% of total premiums paid

3. Basic Sum Assured

Some Other Famous Pension Schemes in India Initiated by the Government

1. National Pension System (NPS)

The National Pension System (NPS) is a government-backed retirement savings scheme launched on 1st January 2004. Regulated by the Pension Fund Regulatory and Development Authority (PFRDA), NPS aims to encourage citizens to save for their post-retirement life. It is a voluntary, long-term investment plan that offers market-linked returns and tax benefits.

Key Features of NPS:

• Open to All Citizens: Available to all Indian citizens (including NRIs) aged 18 to 70 years on a voluntary basis.
• Regulated Scheme: Managed by the PFRDA, ensuring transparency and safety.
• Flexible Investment: Investors can choose their fund managers and investment options (equity, corporate bonds, government securities).
• Attractive Returns: Offers 9% to 12% annualized returns over the years (not fixed).
• Low Cost: NPS has one of the lowest fund management charges among pension products.
• KYC Requirement: Applicants must comply with KYC norms and be legally competent to enter a contract.
• Individual Account: The NPS account is individual and cannot be opened on behalf of another person.
• Exclusions: Overseas Citizens of India (OCI), Persons of Indian Origin (PIOs), and Hindu Undivided Families (HUFs) are not eligible.
• Tax Benefits: Contributions qualify for tax deductions under Section 80C and 80CCD(1B) of the Income Tax Act.

2. Atal Pension Yojana (APY)

Atal Pension Yojana is a government-backed old-age income security scheme aimed at workers in the unorganised sector who are between 18 and 40 years of age and are not income tax payers. It encourages voluntary savings by offering a guaranteed monthly pension after the age of 60. The scheme ensures continuous financial support for the subscriber, spouse, and nominee.

Key Features of APY:

• Eligibility: Open to savings account holders aged 18–40 who are not income taxpayers.
• Focus Group: Designed for poor, underprivileged, and unorganised sector workers.
• Contribution Period: Contributions are made until the age of 60 through auto-debit from a savings account (monthly, quarterly, or half-yearly).
• Guaranteed Pension: Receive a fixed monthly pension of ?1,000 to ?5,000 after 60 years of age, based on contribution.
• Spouse Benefit: After the subscriber's death, the spouse receives the same guaranteed pension for life.
• Nominee Benefit: After the death of both the subscriber and spouse, the nominee receives the accumulated pension wealth.
• Voluntary Exit: Allowed before 60, but a refund is available only for self-contributions and net returns (after charges).
• Death Before 60: Spouse may continue the APY account until the original subscriber would have turned 60 and receive the pension thereafter.
• Tax Benefits: Contributions are eligible for tax deduction under Section 80CCD(1), similar to NPS.

Conclusion

Choosing the best pension scheme in India depends on your retirement goals, how much risk you can take, and your financial needs. Government plans like the National Pension System (NPS) offer tax benefits and good long-term growth. Private plans such as LIC New Jeevan Shanti or ICICI Pru Easy Retirement give fixed, guaranteed income.

If you want returns linked to the market with more flexibility, ULIP-based pension plans are a good option. The best plan is one that matches your lifestyle and helps you stay financially secure after retirement.

Start early, invest smartly, and enjoy a worry-free future.