Italy is the EU country that devotes the largest share of its GDP to pensions and the one whose population is ageing fastest; the statutory age, indexed to life expectancy, will rise to 67 years and 1 month in 2027, while the 2027 budget prepares a flexible exit at 64.

The highest spending in the EU. Under Eurostat's harmonised definition (ESSPROS: old age, survivors, disability and early retirement, public and private schemes), Italy devotes 15.9% of GDP to pensions in 2024, first among the 27, ahead of Austria (15.4%) and France (15.0%), against 12.6% for the EU (provisional). The OECD SOCX database, with a different scope, gives 16.1% of GDP for public pensions and 0.8% for private schemes in 2021; the two measures are not comparable as a single series.

A public system moving to a contribution-based formula. Pensions are mostly paid by INPS, on a pay-as-you-go basis. Since the Dini reform (1995) and then the Fornero reform (2011), the calculation is gradually shifting from a formula based on final earnings (retributivo) to a "contributory" calculation proportional to contributions paid over the whole career and converted into a pension by coefficients linked to life expectancy. Supplementary pension funds, fed in particular by the end-of-service allowance (TFR), remain minor.

A high statutory age, an earlier exit. The age for the pensione di vecchiaia is 67 (with 20 years of contributions). But many retirements go through early retirement based on the contribution period (42 years and 10 months for men, one year less for women, until 2026). The OECD's effective age of labour market exit is 64.0 for men and 62.6 for women in 2024. The employment rate of 55-64-year-olds reaches 61.2% in 2025 and that of 60-64-year-olds 50.4% (Eurostat), up more than three points in a year but below the EU average (55.0%).

Retirees on a par with the working-age population. The median income of people aged 65 and over equals 100% of that of the under-65s in 2025 (Eurostat), against 91% in the EU. Part of the pensions in payment is still calculated under the old, more generous formula.

The least favourable demographics in the group. The old-age dependency ratio reaches 39.0 people aged 65 and over per 100 people aged 15-64 on 1 January 2025 (Eurostat), against 35.9 in Germany, 35.5 in France and 34.5 in the EU. Low fertility shrinks the contributor base.

An age that follows life expectancy. The law links the statutory age to life expectancy. The 2026 budget law staggered the next increase: the age will rise to 67 years and 1 month in 2027, then 67 years and 3 months in 2028 (INPS), instead of three months at once; contribution periods for early retirement follow the same adjustment, with arduous jobs exempt. The Ragioneria generale dello Stato projects 67 years and 6 months in 2029 (September 2026 report, projection). The special schemes Quota 103 and Opzione donna were not renewed beyond rights acquired by the end of 2025.

The 2027 budget. The budget bill approved by the Council of Ministers on 28 October 2026 (about €26 billion of measures) provides, according to the press, a fund of about €850 million for a flexible exit at 64, whose conditions will be set by decree in January, as well as a pension account funded by the State with €100 a year for each newborn. Parliament must pass the bill before 31 December.

Spending projected to rise until the 2040s. In the Ragioneria's previous report (December 2025, projection), pension spending would rise from about 15% to 17% of GDP around 2040, before falling as the contributory calculation takes over. The Osservatorio sui conti pubblici (Catholic University) considers these projections optimistic, notably on productivity.

The open questions. The debate pits those who want to freeze the age at 67 or multiply early-exit routes (notably the Lega) against those who stress the cost of any exemption for a highly indebted country (Ragioneria, Bank of Italy). Three trade-offs: (1) age and its indexation; (2) early-exit routes; (3) the adequacy of future contributory pensions, lower for discontinuous careers. Citoyen presents these options without taking sides.

Set against its neighbours, Italy combines the highest spending, the oldest population and retirees on a par with the working-age population.

Three takeaways. (1) Spending: at the top. At 15.9% of GDP in 2024 (Eurostat), Italy spends more than France (15.0%), Spain (13.2%), the EU (12.6%) and Germany (11.7%). (2) Exit age: close to average for men. Men leave employment at 64.0, as in Germany (64.2) and above France (61.9); women earlier (62.6), reflecting shorter careers (OECD, 2024). (3) Living standards: among the most favourable. The median income ratio of people aged 65 and over (1.00 in 2025) exceeds France's (0.97), the EU's (0.91) and Germany's (0.83), behind Spain (1.06).

The widest gap lies in the employment of 60-64-year-olds: 50.4% in Italy against 67.6% in Germany in 2025, despite rapid progress since the Fornero reform.