There are two major CPF changes that will affect me in 2025. We are only 1 day away to end the year 2024 and start the new year 2025. The CPF (Central Provident Fund) is the cornerstone of every Singaporean’s retirement plans. As such, it is important to pay attention what will change to our CPF so that we can plan and act accordingly to stay on track for our retirement.
The Central Provident Fund (CPF) is a mandatory savings scheme in Singapore that helps working individuals set aside funds for retirement, healthcare, and housing needs. Both employers and employees contribute a portion of the employee’s salary to the CPF, which is then held in individual accounts. CPF members can use their funds for various purposes such as purchasing a home, paying for healthcare expenses, and ensuring financial security in retirement. The CPF is an important social security system in Singapore that provides a safety net for citizens and permanent residents.
There are more than two changes to CPF (Central Provident Fund) in 2025 and I shall only cover those changes that affect me. For the other changes, you should refer directly to CPF’s website. I am in my mid-forties and below are the two major CPF changes that will affect me.
1. Enhanced Matched Retirement Savings Scheme (MRSS) Grant Cap and Age Cap in 2025
Matched Retirement Savings Scheme (MRSS) was launched in the year 2021 to help senior Singapore Citizens with lower retirement savings to save more, by matching the cash top-ups made to their Retirement Accounts (RA). My mother who is a housewife is one of them.
In the year 2024, I topped up S$600 using cash to her Retirement Account (RA) so that she receives a dollar-to-dollar matching grant from the Government.
In the upcoming year 2025, the matching grant cap will be increased from the current S$600 to $2,000 per year, with a S$20,000 cap over an eligible member’s lifetime. The age cap of 70 years old will also be removed. This means Singapore senior citizens who are aged 55 and above will be applicable for Matched Retirement Savings Scheme (MRSS).
With this major change, I will need to set aside S$2,000 in the upcoming year to top up my mother’s retirement account.
2. CPF Monthly Salary Ceiling to Increase to S$7,400
In 2025, the current CPF monthly salary ceiling will be increased from the current S$6,800 to S$7,400 from 1st January 2025. However, the CPF annual salary ceiling of S$102,000 and CPF annual limit of S$37,740 will remain unchanged.
Wages above the ceiling of S$7,400 are excepted from CPF contributions for both you and your employer. The change was announced in Budget 2023 whereby the CPF monthly salary ceiling will be gradually raised to $8,000 in 2026.
How does this affect me? The increase in salary ceiling will reduce my monthly take-home pay. However, the change will boost my overall total monthly earnings after factoring in the increased CPF contributions from my employer.
The CPF calculator has been updated to include rates applicable from January 2025. We can use the CPF calculator to compute the monthly CPF contributions payable for private sector and non-pensionable government employees.
Here is the link to the CPF calculator: CPFB | CPF contribution calculator
Other Changes to CPF in 2025
From 1st January 2025:
- The Enhanced Retirement Sum (ERS) will be raised to four times the Basic Retirement Sum (BRS).
- The CPF contribution rates for senior workers will be increased by 1.5%.
From second half of January 2025:
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- The Special Account (SA) will be closed for those aged 55 and above.
If you are a platform worker, you can opt in to increase CPF contributions as a platform worker.
My References to This Post:
Sources:
CPFB | CPF changes in 2025 and how they benefit you, Date accessed: 30th December 2024
CPFB | Matched Retirement Savings Scheme (MRSS) – what you need to know, Date accessed: 30th December 2024