Singapore’s Matching Grant Schemes

by | Jan 26, 2026 | Uncategorized | 0 comments

Executive Summary

Singapore’s expanded Matched Retirement Savings Scheme and newly launched Matched MediSave Scheme represent a significant policy intervention to address retirement adequacy concerns among citizens with lower savings. This case study examines the impact of these government matching grant programs on Singapore’s aging population and healthcare preparedness.

1. Matched Retirement Savings Scheme (expanded)

  • Around 750,000 Singaporeans now eligible in 2026
  • Government matches cash top-ups dollar-for-dollar up to $2,000/year
  • Lifetime cap of $20,000
  • Eligibility: Singapore citizens aged 55+ with Retirement Account savings below the Basic Retirement Sum (currently $110,200 in 2026)
  • Now includes Singaporeans with disabilities of all ages (a new expansion from Jan 1, 2026)

2. Matched MediSave Scheme (new pilot)

  • 185,000 Singaporeans eligible
  • Launched Jan 1, 2026 as a 5-year pilot (runs until 2030)
  • Government matches cash top-ups up to $1,000/year
  • Eligibility: Citizens aged 55-70 with MediSave savings below half the Basic Healthcare Sum (less than $39,500 in 2026)

Notable Achievements

The retirement scheme saw significant growth in 2025:

  • Over 250,000 people received matching grants
  • $456 million in total matching grants credited
  • This was a major jump from 103,000 members and $61 million in 2024

About 165,000 members qualify for both schemes and could receive up to $3,000 in total matching grants for 2026. Eligible members will be notified by end of January, and matching grants will be credited automatically in early 2027 for top-ups made by December 31, 2026.

Background

Singapore faces mounting demographic pressures with an aging population and declining fertility rates. The Central Provident Fund (CPF) system, while comprehensive, has revealed gaps in retirement adequacy for certain segments of the population, particularly those with interrupted careers, lower lifetime earnings, or disabilities.

The Matched Retirement Savings Scheme was introduced in 2021 to incentivize retirement savings among seniors with lower CPF balances. Following its initial success, the government significantly enhanced and expanded both schemes in 2025-2026.

Policy Evolution

Phase 1: Initial Launch (2021-2024)

  • Targeted seniors aged 55-70 with below-threshold retirement savings
  • Limited uptake: 103,000 participants in 2024
  • Total disbursement: $61 million in matching grants

Phase 2: Major Enhancement (2025)

  • Removed the 70-year age cap
  • Doubled annual matching limit from $1,000 to $2,000
  • Maintained lifetime cap at $20,000
  • Result: 250,000 participants (143% increase)
  • Disbursement: $456 million (647% increase)

Phase 3: Comprehensive Expansion (2026)

  • Extended eligibility to Singaporeans with disabilities of all ages
  • Launched parallel Matched MediSave Scheme for healthcare savings
  • Combined reach: 750,000 eligible for retirement scheme, 185,000 for MediSave scheme

Impact Analysis

1. Financial Impact on Participants

The matching grants provide substantial boosts to retirement savings:

Example Scenario – Senior Citizen:

  • 60-year-old with $80,000 in Retirement Account (below $110,200 BRS threshold)
  • Makes maximum cash top-up: $2,000 annually
  • Government matching: $2,000 annually
  • Total annual increase: $4,000
  • Over 10 years: $40,000 in combined contributions, plus compound interest at approximately 4% CPF interest
  • Projected retirement account growth: Additional $48,000-50,000 by age 70

Example Scenario – Person with Disability:

  • 35-year-old with disability, $30,000 in Special Account
  • Makes annual top-ups from age 35-54 (20 years)
  • Maximum matching: $2,000 × 20 years = $40,000 in contributions ($20,000 personal + $20,000 government)
  • With compound interest over 20 years: Projected additional $60,000-65,000 by age 55

2. Broader Economic Impact

Scale of Government Investment:

  • 2026 projected outlay: Approximately $600-700 million across both schemes
  • This represents a 10-fold increase from the $61 million disbursed in 2024
  • Demonstrates significant fiscal commitment to retirement adequacy

Multiplier Effects:

  • Incentivizes household savings behavior
  • Reduces future social welfare burden
  • Enhances long-term healthcare financing sustainability

3. Social Impact

Inclusion of Persons with Disabilities: The 2026 expansion to include younger Singaporeans with disabilities addresses a critical gap. This demographic often faces:

  • Lower lifetime earnings due to employment barriers
  • Higher healthcare costs
  • Reduced capacity for wealth accumulation

Early intervention through matched savings enables this vulnerable group to build retirement security during their working years rather than playing catch-up in later life.

Intergenerational Support: The schemes facilitate family contributions, as relatives can make top-ups on behalf of eligible members. This strengthens intergenerational financial support systems while providing tax-efficient wealth transfer mechanisms.

4. Healthcare Preparedness

The Matched MediSave Scheme specifically addresses healthcare financing concerns:

  • 185,000 seniors with below-median MediSave balances gain access
  • Up to $1,000 annual matching for healthcare savings
  • Targets ages 55-70, the period when healthcare needs typically escalate
  • Five-year pilot allows for evaluation and refinement

Healthcare Cost Context: With Singapore’s aging population and rising healthcare costs, ensuring adequate MediSave balances is critical. The Basic Healthcare Sum serves as a benchmark for meeting expected healthcare needs, and those falling below half this amount face significant financial vulnerability.

Success Factors

1. Simplified Access

  • Automatic eligibility determination based on CPF records
  • Email/letter notifications to eligible members
  • Matching grants credited automatically without additional applications

2. Generous Matching Ratios

  • Dollar-for-dollar matching provides strong incentive
  • Annual limits ($2,000 for retirement, $1,000 for healthcare) are meaningful relative to typical household savings

3. Targeted Design

  • Means-tested based on CPF balances ensures resources reach those who need it most
  • Dual-scheme approach allows individuals to prioritize based on personal circumstances

4. Long-term Commitment

  • Lifetime caps ($20,000) encourage sustained participation
  • Five-year MediSave pilot signals government willingness to evaluate and expand successful programs

Challenges and Considerations

1. Liquidity Constraints

Despite the attractive matching, eligible individuals may lack disposable income for cash top-ups. Those with the lowest CPF balances often have the least capacity to contribute additional funds.

2. Awareness and Education

The significant jump from 103,000 to 250,000 participants after the 2025 enhancements suggests initial programs suffered from low awareness. Continued outreach is essential to maximize uptake.

3. Trade-offs Between Schemes

The 165,000 Singaporeans eligible for both schemes must choose between retirement income and healthcare savings, potentially creating difficult financial planning decisions.

4. Long-term Fiscal Sustainability

With 750,000 eligible participants potentially claiming $2,000 annually, the maximum theoretical cost could reach $1.5 billion per year. While actual uptake will be lower, this represents a substantial and growing fiscal commitment.

Policy Implications

For Singapore

Complementary Measures Needed:

  • These schemes work best alongside broader retirement adequacy initiatives
  • May need to be paired with earned income supplements for working-age individuals with low CPF contributions
  • Continued monitoring of BRS and BHS adequacy is essential

Potential for Further Enhancement:

  • Consider higher matching ratios for the most vulnerable (e.g., those with near-zero CPF balances)
  • Explore extending the MediSave scheme beyond the five-year pilot if successful
  • Evaluate whether matching caps should be adjusted for inflation

For Other Countries

Singapore’s approach offers valuable lessons for nations grappling with retirement adequacy:

Replicable Elements:

  • Using automatic enrollment and administration reduces barriers to participation
  • Government matching leverages private savings rather than pure transfers
  • Means-testing ensures fiscal efficiency
  • Targeting specific vulnerable groups (seniors, persons with disabilities) maximizes impact

Context-Specific Considerations:

  • Requires robust digital infrastructure and financial systems
  • Works best with existing mandatory savings framework like CPF
  • Needs fiscal capacity for substantial government matching commitments

Conclusion

Singapore’s expanded matching grant schemes represent a sophisticated policy response to retirement inadequacy. The dramatic increase in participation following the 2025 enhancements demonstrates the power of well-designed incentives. The 2026 expansion to include persons with disabilities and the parallel healthcare savings scheme show policy evolution based on identified gaps.

Early evidence suggests meaningful impact: 750,000 Singaporeans now have enhanced pathways to retirement security, and government investment has increased tenfold within two years. The true test will be long-term outcomes measured through retirement adequacy rates, healthcare financing sustainability, and reduced reliance on social assistance programs.

The schemes exemplify Singapore’s pragmatic approach to social policy—targeted, incentive-based, and fiscally sustainable—while addressing fundamental concerns about aging, healthcare costs, and economic security. As other developed nations confront similar demographic challenges, Singapore’s experience offers a compelling model for encouraging personal responsibility while providing meaningful government support for those who need it most.