Retirement aage in pension could be as higha s 71 for young Italians. Image shows older lady sitting on chair in Italian back street.

71 the retirement age for young Italians says report

Business News

Young people in Italy who enter the labour market now will not reach retirement age until they are 71. This is according to the OECD said in its Pensions at a Glance Report released on Wednesday.

In its Pensions at a Glance report, the Organisation for Economic Cooperation and Development (OECD) indicates that Italy, following Denmark, has the highest retirement age. This is attributed to Italy being one of the nine OECD countries tying the statutory retirement age to life expectancy.

According to the report, for those entering the labour market now, the regular retirement age would reach 70 in the Netherlands and Sweden, 71 in Estonia and Italy, and even 74 in Denmark, based on established links to life expectancy.

Current statutory retirement age

The statutory retirement age in Italy was 67 as of 2023, marking a significant increase after reforms during the Global Financial Crisis. The report highlighted Italy’s broad access to early retirement without penalties.

In 2022, one could retire at age 64 with 38 years of contributions (Quota 102), which was the normal retirement age. In 2023, Quota 102 expanded with Quota 103, allowing retirement at age 62 with 41 years of contributions. There is also an alternative option to retire early at age 64 with 20 years of contributions, resulting in substantially lower benefits.

 “As of 2023, the statutory retirement age is 67 in Italy, increasing strongly after the reforms enacted during the Global Financial Crisis”.

The report added that Italy provides broad access to early retirement, often without a penalty. “In 2022, a person could retire at age 64 with 38 years of contributions (Quota 102), which was thus the normal retirement age.

“In 2023, Quota 102 was expanded with Quota 103 allowing to retire at age 62 with 41 years of contributions.”

An election promise for the League was to allow early retirement after 41 years of contribution. That would equate to entering the labour market at the age of 22 (post degree), making retirement age 63.

Highest pension contribution rates

The report stated the effective mandatory contribution rate for pensions in Italy was 33% of the average wage in 2022, the highest within the OECD, well above the average of 18.2%.

It also noted that countries with high contribution rates, including Italy and France, aimed to provide above-average pension benefits.

“However, in addition higher mandatory contribution rates might hurt the competitiveness of the economy, and lower total employment while potentially increasing informality,” the report said.

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