Major Updates to CPF Special Account in 2025: Singapore’s Central Provident Fund (CPF) will undergo significant changes in 2025, particularly affecting the Special Account (SA). These updates are designed to enhance retirement savings, streamline account management, and extend benefits to more individuals.
This article breaks down the seven critical updates to CPF’s Special Account and related systems, highlighting what they mean for Singaporeans.
Major Updates to CPF Special Account in 2025
| Update | Details |
|---|---|
| Closure of Special Account (SA) | From January 2025, the SA for members aged 55+ will be closed, with funds transferred to the Retirement Account (RA) up to the Full Retirement Sum (FRS). Excess funds will move to the Ordinary Account (OA). |
| Enhanced Retirement Sum (ERS) Increase | The Enhanced Retirement Sum (ERS) rises to $426,000 from January 2025, boosting retirement payouts for CPF LIFE. |
| CPF Contribution Rates for Senior Workers | CPF contribution rates increase for workers aged 55-65, with a 0.5% increase for employers and 1% for employees. |
| CPF Monthly Salary Ceiling Adjustment | The CPF monthly salary ceiling rises to $7,400 to allow middle-income workers to save more for retirement. |
| Silver Support Scheme Enhancements | Quarterly payouts under the scheme will increase by 20%, offering greater financial support for lower-income seniors. |
| Workfare Income Supplement Scheme Changes | The income cap increases from $2,500 to $3,000, benefiting more lower-wage workers. |
| Platform Workers CPF Contributions | Platform workers (e.g., gig economy workers) will start CPF contributions, improving their retirement and housing savings. |
The 2025 updates to Singapore’s CPF system mark a significant step toward enhancing retirement savings and financial security for all Singaporeans. From the closure of the Special Account to increased CPF contribution rates and Silver Support Scheme enhancements, these changes ensure that CPF remains relevant in a rapidly evolving economy.
For more details, visit the CPF Board’s official website.
1. Closure of the Special Account (SA)
From January 2025, the CPF Special Account (SA) for members aged 55 and above will be closed. Savings in the SA will be transferred to the Retirement Account (RA) up to the Full Retirement Sum (FRS). Any excess funds will move to the Ordinary Account (OA), ensuring better alignment of savings with retirement needs.
Why This Matters
- Streamlined Accounts: By consolidating funds, the CPF aims to simplify account management for older members.
- Higher Interest Rates: Funds in the RA earn higher interest rates, benefiting retirees with larger payouts.
- Member Flexibility: Excess funds in the OA can be transferred back to the RA, up to the Enhanced Retirement Sum (ERS), for even greater returns under CPF LIFE.
This change ensures that savings are optimized to meet long-term retirement needs while offering flexibility for members.
2. Increase in the Enhanced Retirement Sum (ERS)
The Enhanced Retirement Sum (ERS) will rise to $426,000 in 2025, up from $288,000 (for the Basic Retirement Sum, or BRS). This increase allows CPF members to set aside more savings for higher monthly payouts during retirement.
Implications
- Higher Monthly Payouts: CPF LIFE payouts will increase for those who top up their RA to the new ERS.
- Encouragement to Save More: Members are incentivized to set aside additional funds for a more secure retirement.
For example, a CPF member who tops up to the new ERS can expect significantly higher monthly payouts under the CPF LIFE Standard Plan starting at age 65.
3. Adjustments to CPF Contribution Rates for Senior Workers
CPF contribution rates for workers aged 55-65 will increase in 2025. Employers’ contribution rates will rise by 0.5%, while employees’ rates will increase by 1%.
Benefits
- Enhanced Retirement Savings: Higher contributions boost overall retirement funds for senior workers.
- Support for Longer Working Lives: As more Singaporeans work beyond traditional retirement ages, increased contributions ensure continued growth in their savings.
Employers will receive a one-year transition offset to manage the increased costs.
4. Adjustment of the CPF Monthly Salary Ceiling
Starting January 1, 2025, the CPF monthly salary ceiling will increase to $7,400. This is part of a gradual adjustment to reach $8,000 by 2026.
Key Points
- Increased Savings Potential: Higher ceilings allow workers to contribute more to their CPF accounts, especially middle-income earners.
- Alignment with Wage Growth: This change ensures CPF contributions remain relevant to current income levels.
Members should review their CPF contributions and adjust financial plans to benefit from this change.
5. Silver Support Scheme Enhancements
The Silver Support Scheme, which provides quarterly payouts to lower-income seniors, will see a 20% increase in benefits starting in 2025.
What This Means
- Greater Financial Support: Seniors in need will receive higher payouts to help with daily expenses.
- Broader Coverage: Adjustments to eligibility criteria may expand access to the scheme, benefiting more individuals.
These enhancements are part of broader efforts to improve retirement adequacy for vulnerable groups.
Singapore CPF Contribution Table 2025: Find Out How Much You Need to Pay
6. Changes to the Workfare Income Supplement Scheme
The Workfare Income Supplement Scheme (WIS) will raise its income cap from $2,500 to $3,000, extending benefits to more lower-wage workers.
Advantages
- Increased Coverage: More workers will qualify for WIS payouts.
- Enhanced Support: Higher payouts ensure that lower-income workers can save more for retirement.
7. Platform Workers to Start CPF Contributions
From January 1, 2025, platform workers, such as ride-hailing drivers and delivery personnel, will begin contributing to CPF accounts.
Impacts
- Improved Retirement Savings: Contributions will enhance retirement adequacy for gig economy workers.
- Housing Savings: CPF contributions can also be used for housing needs, benefiting younger platform workers.
This change is part of ongoing efforts to extend CPF’s benefits to non-traditional employment sectors.
FAQs On Major Updates to CPF Special Account in 2025
1. Why is the Special Account (SA) being closed?
The closure simplifies CPF account management by consolidating retirement-focused savings into the RA, which offers higher interest rates.
2. How will the ERS increase affect me?
The higher ERS allows you to set aside more for retirement, resulting in increased monthly payouts under CPF LIFE.
3. What if I’m a senior worker?
Increased CPF contribution rates will boost your retirement savings, while employers receive transitional support to manage additional costs.
4. How does the new salary ceiling impact me?
Higher ceilings mean that a larger portion of your income will attract CPF contributions, increasing your savings.
5. What are the benefits for platform workers?
CPF contributions will improve retirement and housing savings, offering better financial security for gig economy workers.
