Up to 37% of our salary goes into our CPF accounts each month. This makes the CPF scheme central to our home purchase, medical and retirement plans.
To ensure we make the most of our CPF savings, we need to understand the CPF scheme. While the CPF scheme is complicated, with many aspects folded into it, this is also one of its biggest strengths – making it a comprehensive scheme.
For those keeping up to speed with our CPF accounts, here are 10 changes we can expect in 2025.
Read Also: 15 Little-Known Things About CPF That Most Singaporeans Are Still Unaware About
#1 CPF Monthly Wage Ceiling Will Rise To $7,400 From $6,800
From 1 January 2025, the monthly wage ceiling for CPF contributions will rise to $7,400. This was previously announced during the Singapore Budget 2023 – to increase our monthly CPF contribution ceiling in phases to $8,000 in 2026.
| CPF Monthly Salary Ceiling | |
| Before 1 September 2023 | $6,000 |
| From 1 September 2023 | $6,300 |
| From 1 January 2024 | $6,800 |
| From 1 January 2025 | $7,400 |
| From 1 January 2026 | $8,000 |
While those earning up to $7,400 will receive an overall higher remuneration package, it also means a reduction in take-home pay. Here’s an example of how it works out:
| Salary | 2024 | 2025 |
| Monthly Salary | $7,400 | $7,400 |
| CPF Contributions: Employer Employee |
Based on $6,800: $1,156 $1,360 |
Based on $7,400: $1,258 $1,480 |
| Take-Home Pay (i.e. Monthly salary – Employee CPF Contributions) |
$6,040 | $5,920 |
| Overall Remuneration (i.e. Monthly salary + Employer CPF Contributions) |
$8,556 | $8,658 |
As expected, the ceiling will rise to $8,000 on 1 January 2026. Again, this will mean an even higher overall remuneration, but slightly lower take-home pay. All this will go towards strengthening our CPF savings for our home purchase, medical needs and retirement income.
We should also note that this increase in CPF monthly salary ceiling does not impact the CPF Annual Limit of $37,740 – which means we may receive smaller CPF contributions from our bonuses.
#2 Older Workers Will See Their CPF Contributions Increase 1.5%
Older workers above 55 to 65 will also see their CPF Contribution rates go up. They will contribute a total of 1.5%-points more to their CPF accounts – of which 1% will come from employees and 0.5% will come from employers.
For those above 55 to 60, this will take their CPF contributions to 32.5% (from 31%) of their monthly salary. For those above 60 to 65, this will take their CPF contributions to 23.5% (from 22%) of their monthly salary.
| CPF Contributions | ||||
| Employees’ Age | Total In 2024 | Total In 2025 | By Employer In 2025 | By Employee In 2025 |
| 55 and below | 37% | 37% | 17% | 20% |
| Above 55 to 60 | 31% | 32.5% (+1.5%) |
15.5% (+0.5% |
17% (+1%) |
| Above 60 to 65 | 22% | 23.5% (+1.5%) |
12% (+0.5%) |
11.5% (+1%) |
| Above 65 to 70 | 16.5% | 16.5% | 9% | 7.5% |
| Above 70 | 12.5% | 12.5% | 7.5% | 5% |
The full increase in CPF contributions will go into older workers’ Special Account or Retirement Account.
Again, this will mean a higher overall pay packet, but a lower take-home pay for employees.
Read Also: Senior Worker CPF Contribution Rates And CPF Transition Offset Scheme: What Businesses Need To Know
#3 Special Account For Those Above 55 To Be Closed Down
Announced during Budget 2024, the closure of the Special Account for those above 55 may have been in the works for years – to eliminate the CPF Shielding Hack.
From the second half of January 2025, those 55 and above will have their CPF Special Accounts shut down. Their Special Account savings will flow into their Retirement Account, up to the FRS. Any savings above the FRS will flow into their Ordinary Account – where we can withdraw, top-up into our Retirement Account up to the Enhanced Retirement Sum (ERS) or leave them in the OA.
Excess Special Account savings that flows into our Ordinary Account will no longer earn the floor rate of 4.0% p.a. that the Special Account paid. Instead, it will earn 2.5% p.a.
Read Also: 4 Ways That Closing The CPF Special Account Is An Elegant Solution For The Government
#4 FRS Will Rise To $213,000 From $205,800
Our Full Retirement Sum (FRS) will increase 3.5% to $213,000 in 2025, from $205,800 in 2024. This is a standard increment done each year to ensure that our FRS is in line with inflation and cost-of-living – and ultimately able to provide a CPF LIFE monthly payout that will provide for a basic retirement lifestyle.
This will mean the Basic Retirement Sum (BRS) and Enhanced Retirement Sum (ERS) will go up in tandem. In 2025, the BRS will be $106,500 (half of the FRS), while the ERS will be $426,000 (2x the FRS).
Read Also: Here’s What Your CPF Full Retirement Sum Might Look Like When You’re 55
#5 ERS Rises To 2x FRS (Compared To 1.5x Previously)
As part of the same announcement to close the Special Account during the Singapore Budget 2024, it was also announced that the Enhanced Retirement Sum will rise to 2x the FRS from 2025, instead of 1.5x the FRS.
This means that the ERS will now be $426,000 (2x FRS) in 2025, instead of the initial $319,500 (1.5x FRS). The increase from 1.5x the FRS to 2x the FRS will allow those with excess Special Account savings to top-up their Retirement Accounts if they wish to.
Those who turn 55 in 2025 and set aside the new ERS, can look forward to an estimated CPF LIFE monthly payouts of $3,330 a month. Under the old limit of 1.5x the FRS, they would only get an estimated $2,530.
#6 BHS Will Rise To $75,500 In 2025, From $71,500 In 2024
In 2025, the Basic Healthcare Sum (BHS) will rise 5.6% to $75,500. While, similar to the FRS, we can expect a rise in the BHS each year, the 5.6% rise is the highest it’s been since the scheme replaced the older MediSave Minimum Sum scheme in 2016.
Going forward, we may have to expect higher increases in the BHS (and possibly even the FRS).
Read Also: CPF Medisave: Here’s How Your Basic Healthcare Sum Might Look Like When You’re 65
#7 Age Cap Removed, Matching Grant Cap For The MRSS To Be Raised To $2,000 (From $600 Previously)
The Matched Retirement Savings Scheme (MRSS) helps seniors with lower retirement savings build a bigger nest egg for their retirement through a dollar-for-dollar matching grant from the government.
From 1 January 2025, there will be a removal of the age cap for eligible seniors. At the same time, the matching grant cap will also be raised.
| Enhancements To The MRSS | Current | From 1 Jan 2025 |
| Removal of Age Cap | 55 to 70 | 55 and above |
| Increase in Matching Grant Cap | $600 per year | $2,000 per year ($20,000 lifetime cap) |
Following this enhancements, the scheme will also stop providing tax relief for givers of cash top-ups that attract the enhanced matching grant.
Read Also: Step By Step Guide To Top Up Your CPF Matched Retirement Savings Scheme (MRSS)
#8 Platform Workers To See CPF Deductions From 2025
From 1 January 2025, Platform Operators are required to deduct CPF contributions from Platform Workers’ earnings and submit it to the CPF Board every month. This will be gradually increased between 2025 and 2028 to match that of employers and employees.
Younger Platform workers, born on or after 1 January 1995, and those who opt in, will have their OA, SA and MA contributions deducted.
For Platform Workers who did not opt in, only their MA contributions will be deducted.
#9 Platform Workers CPF Offset Transition Support Package For Platform Workers
Platform Workers will be given a Platform Workers CPF Offset Transition Support package between 2025 and 2028. This is because they will see a deduction in their take-home pay after contributing to their own CPF accounts.
| 2025 | 2026 | 2027 | 2028 |
| 100% offset of OA and SA increase from previous year | 75% offset of OA and SA increase from previous year | 50% offset of OA and SA increase from previous year | 25% offset of OA and Sa increase from previous year |
Here’s an illustrative example from the CPF website, as to how the Platform Workers CPF Offset Transition Support scheme can work.
Source: CPF
#10 Workfare Income Supplement (WIS) For Platform Workers Given Monthly
From 2025, Platform Workers will receive their Workfare Income Supplement (WIS), at the same rate as Self-Employed Persons (SEPs), monthly rather than annually.
| Age | Maximum WIS Per Year (From 2025) |
| 30-34 | $1,633 |
| 35-44 | $2,333 |
| 45-59 | $2,800 |
| 60 and above | $3,267 |
| Persons with disabilities will receive the same amount as those who are aged 60 and above. | |
10% of WIS payments will be made in cash, while the other 90% will be to our MediSave Account.
From 2029, eligible Platform Workers and those who opted in to increased CPF contributions will receive higher WIS payments – at the same rate as employees. Eligible platform workers who have not opted in to the increased CPF contributions will continue to receive WIS at the same level as SEPs.
The post 10 Changes To CPF Scheme That Will Happen In 2025 appeared first on DollarsAndSense.sg.
