Increase in retirement age, Bankitalia pushes: 'Ensures fairness'
Italy has the highest pension expenditure in Europe. This is why, for Bankitalia, it would be better not to block the increase of the retirement age
A mechanism that 'it would be better not to touch'. It is that on the adjustment of the retirement age to life expectancy. Which, translated, means continuing to raise the threshold to stop working since, in Italy, people are living longer and longer.
"Equity problem"
This is what Fabrizio Balassone, deputy head of the Economics and Statistics department of the Bank of Italy, stressed during the hearing before the Budget committees of the House and Senate. 'There is a problem of generational equity,' he said, 'and we have this increase in spending that can complicate public finance management, and a lot.
Highest pension expenditure in Europe
Balassoni's speech refers to the Italian pension expenditure which, in relation to GDP, is the highest in Europe, "at 15.6 per cent in 2022 against an average of 11.4 per cent". This, after the average effective retirement age has already increased by more than five years between 2001 and 2024, to 64.6 years, and the labour market participation rate in the 55-64 age group has more than doubled, from 28.2% to 61.3%.
The manoeuvre bill
The manoeuvre bill, on the other hand, envisages that the adjustment will be one month in 2027 (i.e. retiring at 67 years and one month) and two months in 2028 (retiring at 67 years and three months). In addition to the suspension until 2029 for heavy professions.
Yet, 'updating should normally take place every two years for everyone,' says Bankitalia, 'however, there have been several exceptions'. But the mechanism 'of indexing the retirement age to longevity was introduced to rebalance between generations the relationship between the time of life spent at work and that spent in retirement'. And, therefore, it will help in the coming years to limit the growth in pension expenditure caused by the ageing population.
