Major changes will take effect in the Singapore Central Provident Fund (CPF) in 2025, which will closely affect workers, retirees, and employers. If you are to plan your finances around the updated contribution rates, higher salary ceiling, and changes to retirement accounts, you must understand the changes well.
This guide will help break down the changes in CPF reference into easily digestible segments for you to comprehend the implications on take-home pay, retirement savings, and, ultimately, financial well-being.
Key CPF Changes in 2025 at a Glance
| Update | Details |
|---|---|
| Monthly CPF Salary Ceiling | Increased from $6,800 to $7,400 on Jan 1, 2025. Will rise to $8,000 by Jan 1, 2026. CPF.gov.sg |
| Annual CPF Salary Ceiling | Remains at $102,000. |
| Higher CPF Rates for Senior Workers | Increased by 1.5 percentage points for workers aged 55 to 65. |
| Special Account (SA) Closure | SA will close for members aged 55+, with funds transferred to Retirement (RA) or Ordinary Account (OA). |
| Enhanced Retirement Sum (ERS) | Increased to $426,000 in 2025. |
| Matched Retirement Savings Scheme (MRSS) | Expanding in 2026 to include Singaporeans with disabilities of all ages. |
The CPF System Overview
The CPF is a compulsory savings scheme in favor of Singaporeans and Permanent Residents for securing their financial future concerning retirement, health, and housing. National contributions from the employer and employee are distributed into four different accounts:
- Ordinary Account, or OA-for housing, insurance, and education
- Special Account, or SA-for retirement purposes (until the age of 55) investments
- MediSave Account, or MA-for medical expenses
Retirement Account, or Rneathngingineered in other words, Created when a person attains the age of fifty-five for CPF LIFE payouts.
What’s Changing in 2025?
1. Higher CPF Monthly Salary Ceiling
Starting January 2025, the CPF salary cap increases from 6,800to6,800to7,400, with a further rise to $8,000 in 2026.
What This Means for You:
- Higher earners will contribute more to CPF, reducing take-home pay slightly but boosting retirement savings.
- Example: If you earn $8,000/month:
- 2024: CPF deducted from $6,800.
- 2025: CPF deducted from $7,400.
- 2026: CPF deducted from $8,000.
2. Increased CPF Rates for Older Workers
To support retirement savings, workers aged 55 to 65 will see a 1.5% increase in CPF contributions.
| Age Group | Employer Rate | Employee Rate | Total Rate |
|---|---|---|---|
| Up to 55 | 17% | 20% | 37% |
| 55–60 | 15.5% | 17% | 32.5% |
| 60–65 | 12% | 11.5% | 23.5% |
| 65–70 | 9% | 7.5% | 16.5% |
| 70+ | 7.5% | 5% | 12.5% |
3. Special Account (SA) Closure for Those 55+
From January 2025, CPF will close the SA for members aged 55 and above. Funds will be moved to:
- Retirement Account (RA) (up to Full Retirement Sum).
- Any remaining balance goes to the Ordinary Account (OA).
Why This Matters:
- Simplifies CPF management.
- Maximizes CPF LIFE payouts for retirement.
4. Higher Enhanced Retirement Sum (ERS)
The ERS has been raised to $426,000 in 2025, allowing members to secure higher monthly payouts under CPF LIFE.
5. Expanded Matched Retirement Savings Scheme (MRSS)
At the moment, this scheme was meant to help Singaporeans aged between 55 and 70 years old who have lower retirement savings; from 2026, MRSS will open its arms to include Singaporeans of all ages living with disabilities.
CPF would match cash top-ups to RA dollar-for-dollar, up to $600/year (which is going to be raised to $2,000 for eligible groups in the future).
Encourages family members to help boost savings for loved ones.
Frequently Asked Questions (FAQs)
Q1: How does the higher CPF salary ceiling affect my salary?
If you earn above $6,800/month, more of your salary will now be subject to CPF deductions, slightly reducing take-home pay but increasing retirement savings.
Q2: Is the annual CPF ceiling changing?
No, the annual ceiling remains at $102,000.
Q3: What happens to my SA after I turn 55?
Your SA will close, and funds will transfer to your RA (up to Full Retirement Sum) or OA (if excess remains).
Q4: Can I still top up my RA after 55?
Yes, you can top up to the new Enhanced Retirement Sum (ERS) of $426,000 for higher CPF LIFE payouts.
Q5: Who qualifies for MRSS matching?
Currently, Singaporeans aged 55–70 with low CPF balances. From 2026, it will include persons with disabilities of all ages.