La pension spending it remains in Italy high, with risks to the sustainability of the accounts in the long term. The amount, it notes INPS in its annual report, reflects two features of our social security system: the retirement age and the “generosity” of monthly benefits. Although the retirement age is set at 67, the highest level in the European Union, the actual retirement age is still relatively low (64,2) compared to the EU average, due to the existence of numerous channels of early exit from the labor market.
As for the replacement rate, or the relationship between pension and last salary received before retirement, in Italy it is estimated at around 59% on average and remains among the highest in the Union (almost 14 percentage points above the average).
Pensions, balance of accounts at risk with average age of 64,2 years
The average retirement age has increased from 62,1 to 64,2 years, going from 59,5 to 61,5 years for early pensions and from 64,1 to 67,5 years for old-age pensions. Furthermore, compared to 2022, the average gross monthly pension amount is equal to 1.373,17, recording an increase of 7,1% partly due to the equalization. The total number of people receiving a pension income stands at 16.205.319. The highest average amounts are recorded in the North and in Lazio, while the lowest in Calabria and in the rest of the South.
In 2023, INPS insured persons – workers, employees and self-employed, obliged to make social security payments – were 26,6 million, over 300 thousand more than in 2022 and over one million more than the pre-pandemic value (25,5 million in 2019). The growth in 2023 compared to the previous year was 1,2%, that in 2022 compared to 2021 was 2,1%.
As of December 31, 2023, of the total number of pensioners (approximately 16,2 million), 7,8 million are male and 8,4 million are female. The gross amount of pensions paid overall was 347 billion euros. Although they represent 52% of pensioners, women receive 44% of the income paid by social security, or 153 billion euros compared to 194 billion for men. The average monthly amount of pension income received by men is approximately 35% higher than that of women. Compared to 2022, the average monthly gross amount increased by 7,1% due, at least in part, to the equalization.
The average amount of pensions paid by the Public Employees Management is instead over 2.000 euros, but its weight has decreased to 16% from over 20% in 2020. “The current demographic scenario, characterized by theincrease in the average age of the population, from decline in fertility and from reduction in the working age population, not compensated by theimmigration, is determining a worsening of the ratio between pensioners and taxpayers“, we read in the INPS Report. A situation, common to other EU states, which negatively influences the economic sustainability of almost all pension systems, especially where the incidence of pension expenditure compared to GDP is high.
Pensions, purchasing power falls
According to the INPS report, the significant recovery in employment, both in terms of units and intensity of work, "has not been matched by an increase in income and wages that would fully compensate for the loss of purchasing power resulting from the resurgence of inflation". In fact, according to the Institute, there was a gross increase in wages of 6,8%, compared to a price increase of around 15-17%.
Young people: under 30 earn less
I young, INPS notes, they work and earn less. In the face of an average annual salary in 2023 of almost 26 thousand euros for employed workers (public and private, excluding domestic workers and agricultural workers), the during 30 they earn just over 14 thousand euros, or just over half. Furthermore, in this age group, public sector employees earn about 6-7 thousand euros more than their peers in the private sector.
“The accounts are absolutely in balance in the short to medium term”, comments the president of INPS, Gabriel Fava.
Citizenship income, spotlight on 2023
In 2023, INPS intercepted more than 266 thousand applications for Citizenship Income at risk of fraud, saving 1,05 billion. The institute presented the “Business intelligence system for legality and the fight against abuse” which “allows intercepting, through risk scenarios, fraudulent behaviors already in place or even just potential through the analysis and statistical processing of data”.