EPF withdrawal may be allowed during service, with no need to retire or resign: Report

The Employees’ Provident Fund Organisation (EPFO) may soon allow members to withdraw their savings once every 10 years, according to a Moneycontrol report. This potential shift could offer greater financial flexibility to India’s vast salaried workforce, including government employees, by enabling them to access funds without having to wait until retirement or job loss.

As per the report, the Centre is considering a proposal that would permit either full or partial withdrawal of EPF savings every decade. Officials cited in the report believe this approach would help members better plan their finances during major life phases. The proposal includes a possible cap—limiting withdrawals to 60 percent of the corpus every 10 years—to balance flexibility with long-term savings.

Currently, full EPF withdrawal is allowed only upon retirement or after two months of unemployment. Partial withdrawals are restricted to specific needs such as medical treatment, housing, education, or marriage. However, recent updates now allow members to withdraw up to 90 percent of their corpus for housing after just three years of contribution, down from the earlier five-year requirement. 

The auto-settlement limit for advance claims has also been increased from Rs 1 lakh to Rs 5 lakh, streamlining access to funds in urgent situations.

While the proposed policy offers greater liquidity, experts cited in the report caution that frequent access could erode the core objective of building a secure retirement corpus. They also stress the importance of upgrading EPFO’s digital infrastructure to handle increased claims and reduce potential fraud.

With over 7.4 crore active members and a corpus nearing Rs 25 lakh crore, the proposed change—if implemented—would mark a major shift in how India’s retirement savings system functions.