Key CPF Changes in 2025 and How They May Affect You

This post was originally posted on Planner Bee.

The Singapore government has introduced significant changes to the Central Provident Fund (CPF) in 2025 to help Singaporeans manage their finances more effectively. These changes aim to strengthen the CPF system, making it better suited to support healthcare, retirement, and housing needs.

Here are they key changes:

1. CPF monthly salary ceiling raised

From 1 January 2025, the CPF monthly salary ceiling will be raised to S$7,400. It will eventually be increased to S$8,000 in 2026.

The CPF monthly salary ceiling is the maximum portion of your monthly wages that are eligible for CPF contributions. If your wages exceed this ceiling, both you and your employer will no longer need to contribute to CPF for the portion above the ceiling. This increment is meant to help boost Singaporeans’ overall CPF savings while raising their overall monthly earnings.

However, the CPF annual salary ceiling of S$102,000 remains unchanged. This ceiling limits the total CPF contributions for all wages earned during the year.

2. Special Account to be closed

Starting in January 2025, the Special Account (SA) for members aged 55 and above will be closed. Any savings in SA will be transferred to the Retirement Account (RA) up to the Full Retirement Sum (FRS), where they will continue to earn long-term interest.

Any remaining SA savings that are withdrawable will be transferred to the Ordinary Account (OA), which earns a lower short-term interest rate. You can choose to transfer these funds to your RA up to the current year’s Enhanced Retirement Sum (ERS) to benefit from higher long-term interest and receive higher monthly payouts in retirement.

If you have investments under the CPF Investment Scheme-Special Account (CPFIS-SA), there’s no need to sell them immediately. When they are sold or mature after the SA is closed, the proceeds will be transferred to your RA up to the FRS, and the remaining amount will go to your OA.

Read more: Closure of CPF Special Account in 2025: What It Means and 7 Investment Alternatives

3. Enhanced Retirement Sum raised to S$426,000

Starting 1 January 2025, the Enhanced Retirement Sum (ERS) will be raised to S$426,000. This is four times the Basic Retirement Sum (BRS). Members turning 55 will now have the option to top up their Retirement Account (RA) for higher CPF payouts.

For example, based on the monthly payout estimator, a CPF member turning 55 in 2025 who opts to top up to the new ERS could receive monthly payouts between S$3,080 and S$3,300 from age 65 under the CPF LIFE Standard Plan.

Source: Based on ERS, CPF Monthly Payout Estimator

4. CPF contribution rates for senior workers

From 1 January 2025, CPF contribution rates for senior workers aged 55 to 65 will increase by 1.5%. This includes a 0.5% rise in the employer’s contribution and a 1% increase in the employee’s contribution. The aim is to help senior workers build up more savings in their CPF accounts.

5. Changes to the Matched Retirement Savings Scheme (MRSS)

The Matched Retirement Savings Scheme (MRSS) helps lower- to middle-income seniors boost their CPF retirement savings. Under the scheme, the government matches every dollar of voluntary CPF top-ups to the Retirement Account (RA), to a certain limit.

Previously, the limit was S$600, but it has now been raised to S$2,000. The lifetime cap for the MRSS’s dollar-for-dollar match is fixed at S$20,000. For example, if you make a voluntary top-up of S$1,000, the government will also contribute S$1,000 to your CPF (up to S$2,000 a month or S$20,000 over your lifetime).

Before 2025, MRSS was only available to Singaporeans aged 55 to 70. From now on, it will be available to seniors over 70 as well.

6. Changes in Basic Healthcare Sum (BHS)

The Basic Healthcare Sum (BHS) is the estimated amount of savings needed in your CPF MediSave Account (MA) to cover basic subsidised healthcare in old age. It also represents the maximum balance you can hold in your MA.

For CPF members turning 65 in 2025, their BHS will be set at S$75,500, and this will remain fixed for life. For those turning 64 and 63 in 2024 and 2023, their BHS will be S$71,500 and S$68,500, respectively.

For CPF members under 65, the BHS will be adjusted annually to keep pace with the expected growth in MediSave usage. This ensures that the BHS remains relevant for each age group when they reach retirement.

7. Increased CPF contributions for platform workers

Platform workers, such as those providing ride-hail or delivery services, are currently under a platform work agreement with a Platform Operator (PO). From 2025, CPF contribution rates for platform workers and platform operators will gradually increase to match those for regular employees and employers. The rates will rise over five years, with platform workers’ contributions increasing by up to 2.5% annually, and platform operators’ contributions increasing by up to 3.5% annually.

These changes aim to help platform workers build better CPF savings for retirement and healthcare.

8. Enhancements to the Silver Support Scheme (SSS)

The Silver Support Scheme (SSS) offers quarterly cash payments to seniors aged 65 and above who had low incomes during their working years. To qualify, your total CPF contributions by age 55 must not exceed S$140,000, including amounts withdrawn for housing, education, or investments.

Starting in 2025, these cash payments will be increased by 20%. Additionally, the qualifying household monthly income per person threshold will be raised from S$1,800 to S$2,300.

9. Enhancements to the Workfare Income Supplement (WIS) scheme

From 2025, the qualifying income cap for the Workfare Income Supplement (WIS) scheme will be raised from S$2,500 to S$3,000. This ensures continued support for lower-wage workers as their wages grow. Workfare payouts will also increase, with lower-wage senior workers now eligible for a maximum annual payout of S$4,900, up from the current S$4,200.

Closing note

In conclusion, the changes introduced to the CPF system in 2025 reflect the government’s commitment to enhancing financial security for Singaporeans, particularly in their retirement and healthcare years.

The adjustments to the CPF system are designed to provide greater financial stability, particularly for lower-income groups and seniors, helping them to better manage their retirement and healthcare needs. These changes are steps towards a more secure future for Singaporeans as they plan for their long-term financial well-being.