Those with retirement plan invest more in mutual funds : PGIM India Mutual Fund

According to the Retirement Readiness Research Report 2025 by PGIM India Mutual Fund, planners are moving beyond traditional instruments, though the shift remains gradual. Mutual fund adoption has risen from 24% in 2023 to 35% in 2025, signalling growing trust in market-linked products.

Equity ETF adoption has doubled to 11%, while structured retirement tools such as PPF (18%) and NPS (17%) show largely steady traction. Having a retirement plan correlates with broader portfolios, but both groups—those with and without a plan—retain a strong familiarity bias towards fixed deposits (FDs) and gold. Investors with a retirement plan show higher participation in mutual funds, deeper adoption of ETFs and REITs, and greater exposure to PPF (18% vs 13%) and NPS (17% vs 14%), the report said.

Also Read | Which mutual fund categories caught investors’ attention in 2025

The report adds that trust remains the biggest driver of mutual fund adoption—73% of older investors (aged 51–60) prioritise it, compared with 62% among younger cohorts (aged 26–40).

Younger investors marginally lead at 62%, preferring flexibility through shorter premium terms of 3–5 years. This reflects convenience and flexibility being almost as important as growth and risk-taking.

Mutual funds stand out with 87% awareness and 35% current investors, underlining rising trust and adoption. The report highlights that 2025 mirrors 2023, with mutual funds continuing to lead the shift from pure safety towards growth-oriented choices.

While traditional instruments such as FDs and gold (FDs: 59% to 52%; gold: 50% to 45%) saw slight declines between 2023 and 2025, mutual funds emerged as the strongest gainer (23% to 35%). PPF and NPS posted modest gains, while early interest in alternatives like REITs—rising from 4% to 13% between 2022 and 2025—is visible, despite concerns around complexity and volatility.

The third edition of the Retirement Readiness Research Report 2025 noted that retirement has become the No. 1 financial priority for the first time. However, actual preparedness—having a retirement plan in place—has fallen sharply to 37%, down from 67% in 2023.

“While retirement has become the top priority, readiness has declined. This is not a setback but a sign of positive evolution. Indians are beginning to distinguish between safeguarding against risks and actively building their future. With rising surplus incomes and families moving beyond merely providing for children to planning their own retirement, this reflects a maturing mindset focused on self-driven security and dignity. To bridge the gap between aspiration and action, investors, advisers, regulators and fund houses must work together to create an inclusive ecosystem that empowers individuals to take the next step,” said Abhishek Tiwari, CEO, PGIM India Asset Management.

Also Read | Perfect thaali fund! Why Radhika Gupta likes Edelweiss Multi Asset Omni FoF

“Having witnessed the evolution of India’s financial landscape, this report captures a significant shift in household priorities. Rising affluence and the impact of the pandemic have pushed self-oriented goals such as retirement planning, lifestyle upgrades and entrepreneurship alongside traditional family-centric concerns. This marks a mental evolution—from ‘it’s all about the family’ to also asking ‘what about me?’ As financial planning grows more complex, the role of professional advice becomes increasingly critical,” said Ajit Menon, Senior Advisor, PGIM India Asset Management.

“Our research shows that anxiety and negative emotions are far more prevalent among those without a retirement plan, highlighting that financial wellness is as much psychological as monetary. The gap between awareness and action remains wide. Notably, Indians continue to view employers as anchors of stability. Employer-led programmes can therefore act as default enablers by offering education, tools and flexible income solutions, making workplace initiatives a key driver of retirement readiness,” said Dr Sagneet Kaur, SVP – Behavioural Finance & Consumer Insights, PGIM India Asset Management.