Pensions at a Glance 2025: Italy
Table of contents
This country note shows how Italy compares with other OECD countries in Pensions at a Glance 2025. This edition covers recent pension reforms and includes a focus on gender pension gaps.
The employment rate of workers aged 60‑64 has doubled since 2012, but at 47% in Italy in 2024 it is still 10 percentage points (p.p.) below the OECD average. Further improvements in older workers’ employment would cushion a large projected decline in the working-age population in Italy, by more than one‑third by 2060. This decline will negatively weigh on both the pension contribution base and GDP growth. Moreover, relatively high benefits granted at relatively low ages result in high expenditure. Public pension expenditure at about 16% of GDP, second only to Greece in the OECD, at least one‑quarter of which being not financed by pension contributions. To improve the balance between expenditures and contribution revenues, Italy introduced the notional defined contribution (NDC) scheme in 1995, but its slow implementation meant that about half of new retirees were not affected by NDC rules until 2021. As the grandfathering clauses are expiring, the transition has accelerated recently and more than 90% of new pensioners in 2025 have their pensions calculated based on NDC rules for more than half of their careers. NDC rules will fully apply to all new pensioners from around 2040. Until then, the average age of retirement has strong implications for pension finances.
Early retirement schemes have been extended in Italy in 2024, but with tighter eligibility conditions. Some schemes may expire from 2026. The statutory retirement age is 67 and the early retirement age is 64. The career-length requirement for retiring at 64 have increased in 2025 from 20 to 25 years of contributions, and to 30 years from 2030 and pensions are then fully calculated based on NDC rules, which means substantial benefit adjustments compared to calculations based on the still ongoing mixed system. Alternatively, men and women can retire at any age with 42.8 and 41.8 years of contributions, respectively, subject to lower benefit adjustments. An additional option to retire below the statutory retirement age is through the so-called quota system. It was introduced as Quota 100 in 2019, due to be terminated in 2021, but it has been repeatedly extended. However, the eligibility conditions have become more stringent. In 2025, Quota 103 is available from age 62 with 41 years of contributions, compared to Quota 100, initially available from age 62 with 38 years of contributions. Importantly, from 2024, penalties for early retirement using Quota 103 apply to the entire pension amount, whereas before they applied only to the portion accrued after 1995 (or after 2011 for individuals who entered labour market before around 1977). If the October draft of the 2026 Budget Law submitted by the government is confirmed by Parliament, the Quota system will end in 2026.
The statutory and early retirement ages are linked to life expectancy, transmitting all improvements in life expectancy into retirement ages. Currently, the retirement age is indexed fully to life expectancy in Denmark, Estonia, Greece, Italy and the Slovak Republic, whereas in Finland, the Netherlands, Portugal and Sweden, it is increased by two‑thirds of life‑expectancy gains. The Netherlands used to assume a full link, but it was changed into a two‑third link in 2019, before it was applied for the first time; there is also a debate in Denmark to change the one‑to‑one link after 2040. This link was introduced in Italy in 2011 but suspended between 2019 and 2026. The link is supposed to be restored in 2027 and its implementation is included in the October draft of the 2026 Budget Law: the retirement age would increase by one month in 2027 and by two months in 2028. However, the Budget Law proposal excludes some workers engaged in work considered hazardous or arduous from retirement age increases. The Parliamentary Budget Office estimates that eliminating the link would cost Italy around 0.4% of GDP annually until 2040 and would increase the already high debt-to-GDP ratio by 7 p.p. Gradually eliminating the possibilities to retire below 64 is essential to raise employment at older ages and limit the current fiscal pressure. On average across OECD countries, the vast majority of which do not age as fast as Italy, the future early retirement age is 63.9 years. Limiting early retirement options to three years below the statutory retirement age would be more consistent with trends in OECD countries and flexible enough, especially given high life expectancy and high pensions expenditure in Italy.
After having declined from 34% in 2007 to 29% in 2024, the gender pension gap (GPG) still remains substantially larger than the OECD average of 23%. Additionally, there is still a coverage gap in earnings‑related pensions: women make up 45% of earnings-related pension recipients compared with 56% of the population aged 65+. Survivor pensions are included in the GPG, and they reduce the gender gap in earnings-related scheme by around one‑third – a similar reduction from survivor pensions is observed in many other OECD countries.
Source: Figure 2.1.
Source: Figure 2.10.
The GPG results mainly from the very large gender gap in expected lifetime earnings, which exceeds 40% in Italy, compared to an OECD average of 35%. This earnings gap is mainly driven by the low employment of women, as in Greece, Türkiye and Latin American countries. This is related to women’s high share in delivering unpaid care and domestic work, which is larger in Italy than in most other OECD countries. The expected career duration, based on the 2023 employment rates, is 25 years for women in Italy, or 9 years less than for men compared with a gender gap of 6 years in the OECD on average. The expected career duration of women has increased by about 3 years per decade since 1980: at this rate, it would take another 30 years to reach men’s level. Closing the gender employment gap would substantially offset ageing pressure on total contributions and GDP.
Fully aligning age eligibility conditions to early pensions between men and women would support reducing the GPG. Italy provides women with earlier access to pensions, and particularly mothers, which often results in their even lower pensions. According to the so-called women’s option, women who provide care can retire, subject to substantial penalties, with 35 years of contributions at age 62, up from 61 in 2023, while mothers in this situation can even retire up to two years earlier. The October draft of 2026 Budget Law does not include any prolongation of the women’s option. Moreover, mothers benefit from the reduction of the statutory retirement age by four months per child, up to 12 months, if they forgo the pension bonus for having children. This bonus increases the pension amount by 3‑4% for one or two children and by 6‑8% for three of more children.
High old-age average income
Already high old-age to working-age ratio to increase very fast
High contribution rates and high pension spending
High future replacement rates at high retirement ages
Contact
Maciej LIS (✉ maciej.lis@oecd.org).
Stefano SCARPETTA (✉ stefano.scarpetta@oecd.org).
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The full book is available in English: OECD (2025), Pensions at a Glance 2025: OECD and G20 Indicators, OECD Publishing, Paris, https://doi.org/10.1787/e40274c1-en.
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