Pensions 2027: a surge in the total contributions: here’s how much the pension payment will increase

The total contributions accumulated by workers for social security purposes by the end of 2025 will be revalued by 6.3359 per cent. This is, in fact, the 2026 annual capitalisation rate officially confirmed by the Ministry of Labour, to be applied to pensions paid out from 2027 onwards.

Please note that under the contribution-based method of calculating pension benefits, the contributions paid by employees, and by employers on their behalf, are set aside over time in a sort of accounting reserve which, at the end of each year, is revalued by a percentage equal to the average annual compound rate of change in nominal gross domestic product over the previous five years. The figure communicated by the Ministry on the basis of an note from Istat was therefore calculated on the basis of the period 2021–2025.

When a person retires on a fully contribution-based pension or a mixed pension that includes a contribution-based component (which becomes increasingly significant the further back one goes from 1995, the year this calculation system was introduced), the amount of the pension is determined by taking the accumulated balance, revalued up to the penultimate year, adding the contributions paid in the final year, and then multiplying this amount by the conversion coefficient corresponding to the pensioner’s age (in this regard, see *Il Sole 24 Ore* of 20 and 24 October).

The 2026 capitalisation rate is the highest in recent years and forms part of a – as yet brief – upward trend that began in 2022 (0.9973%) after the rate had actually been negative the previous year and had been neutralised by law (so as not to reduce the amount already accumulated), only to be offset by the subsequent increase. However, as the rate is linked to changes in gross domestic product, in periods of weak economic growth, the revaluation of the accumulated amount is likely to be minimal. This has been the case, particularly from 2011 onwards.

Such situations have an impact on the future value of contributory pensions (or the contributory portion of mixed pensions), as the final lump sum to be converted into an annuity will be lower. This is also true of the standard projections, which are normally used and are based on real GDP growth of 1.5 per cent per annum. In this context, as highlighted by *Il Sole 24 Ore* (article of 30 October 2025), actual economic growth over the last thirty years, compared with the assumed rate, has resulted in amounts that are approximately 20 per cent lower.