Who Should Invest in NPS Balanced Life Cycle Fund?
NPS
Jan 15, 2025
Under auto choice, NPS sets your mix of equity, corporate bonds and government bonds by age. It moves money out of equity as you get older. There are four life cycle funds to choose from, and PFRDA renamed them in October 2025.
The names suggest a simple ladder from Low to Aggressive. The equity numbers don’t follow it. The fund called Aggressive starts with less equity than the fund called High, yet on reasonable assumptions it builds the bigger corpus for anyone starting in their 20s or 30s.
The four funds, old and new names
| Earlier name | Name since October 2025 | Equity at 55 and after |
|---|---|---|
| LC25 Conservative | Life Cycle 25 – Low | 5% |
| LC50 Moderate (default) | Life Cycle 50 – Moderate | 10% |
| LC75 Aggressive | Life Cycle 75 – High | 15% |
| Balanced Life Cycle (BLC) | Life Cycle – Aggressive | 35% |
PFRDA circular of 17 October 2025.
If you never picked a fund, you are most likely in Moderate, the default.
Equity by age
| Age | High | Aggressive | Moderate | Low |
|---|---|---|---|---|
| Up to 35 | 75% | 50% | 50% | 25% |
| 40 | 55% | 50% | 40% | 20% |
| 42 | 47% | 50% | 36% | 18% |
| 45 | 35% | 50% | 30% | 15% |
| 50 | 20% | 40% | 20% | 10% |
| 55 and above | 15% | 35% | 10% | 5% |
The rest is split between corporate bonds (Scheme C) and government bonds (Scheme G). Source: PFRDA; LIC Pension Fund.
High starts at 75% equity and cuts it by four points a year between 36 and 45. Aggressive starts at 50% and holds it until 45, then tapers slowly to 35%. The lines cross between 41 and 42. From 42 on, Aggressive has more equity at every age.
Which builds the bigger corpus
The table below models ₹10,000 a month invested until 60 in each fund.
| Start age | Total invested | High | Aggressive | Moderate | Low |
|---|---|---|---|---|---|
| 25 | ₹42 lakh | ₹2.60 crore | ₹2.78 crore | ₹2.35 crore | ₹2.04 crore |
| 30 | ₹36 lakh | ₹1.58 crore | ₹1.73 crore | ₹1.48 crore | ₹1.33 crore |
| 40 | ₹24 lakh | ₹57.5 lakh | ₹63.4 lakh | ₹56.3 lakh | ₹53.8 lakh |
| 45 | ₹18 lakh | ₹33.6 lakh | ₹36.2 lakh | ₹33.1 lakh | ₹32.2 lakh |
Assumes steady annual returns of 11.5% for equity, 7.5% for corporate bonds and 7.0% for government bonds. These are close to the average 10-year returns of all pension funds’ Tier I schemes as on 18 September 2026 (11.55%, 7.52% and 7.07%). Fees are ignored and the allocation resets once a year. Illustrative only.
Aggressive comes out ahead at every starting age. For a 30-year-old, the gap over High is about ₹15 lakh.
The reason is timing. At 30, your corpus is small, so High’s extra equity is working on little money. In your late 40s and 50s, the corpus is at its largest. That is when Aggressive still has 35% to 50% in equity while High is down to 15% to 35%. Over a career from 30 to 60, Aggressive averages about 45% equity a year against High’s 42%.
The result isn’t sensitive to the equity assumption. We reran it with equity returns from 9% to 15% for starting ages from 22 to 30. Aggressive finished ahead of High in every case.
The catch: more equity near retirement
The same feature that builds the bigger corpus also adds risk. Aggressive keeps 35% in equity from 55 to retirement, when your balance is at its peak. A sharp market fall in your last few years would hit it harder than High or Moderate, and there would be little time to recover.
The model above uses steady returns, so it doesn’t show this risk. Real returns arrive unevenly. A crash at 58 matters far more than a crash at 30.
How to choose
- Starting before 35 and comfortable with equity in your 50s: Aggressive is likely to build the bigger corpus. Be ready to switch to a lower-equity option in your last few years if you want to lock in gains.
- Wanting a steep shift to safety: High front-loads equity and is down to 15% by 55.
- Not sure: Moderate, the default, sits in between and cuts equity to 10% by 55.
- Low keeps equity at 25% or below throughout. It suits someone who would otherwise stop contributing during a market fall.
- Wanting control: switch to active choice and set your own mix, with up to 75% equity in Tier I. You can change your choice up to four times a financial year.
One pension fund for everything
Under auto choice, a single pension fund manages all three schemes for you. You can’t split them across funds; that option, up to three pension funds, is available only under active choice. So pick a fund that is sound across equity, corporate bonds and government bonds, not just one of them.
The comparisons of Scheme E, Scheme C and Scheme G show which funds hold up across all three.
Sources: life cycle fund names and allocations: PFRDA circular of 17 October 2025 and LIC Pension Fund. Average returns: Tier I, as on 18 September 2026, NPS Trust data as published by HDFC Securities. Change frequency: PFRDA circular of 27 January 2022. Corpus figures are our calculations under the stated assumptions.
