Italian millennials face prospect of working until they are 75

Already in 2011, to avoid national default, a decision was taken to raise Italy's minimum retirement age gradually to 67 by 2026, with provisions allowing people to keep working until 70. But even that may not be end for today's 30-somethings.

According to simulations by welfare agency INPS on the generation of workers born in 1980, pensions for those without regular national insurance contributions - due to periods of unemployment, for example - may not come before 2055, when they will be 75.

The prediction - which INPS President Tito Boeri made to Sacred Heart Catholic University of Rome students on Tuesday - has captured front-page headlines and reinforced perceptions that there may be no dolce vita waiting Italy's younger generations.

"This kind of news draw me even further away from Italy," 35-year-old Domenico Pecere, who emigrated to Britain 14 months ago, said in a Friday interview with the Corriere della Sera about Boeri's warning.

Official data says that last year almost 27 per cent of Italians aged 15-34 were not in education, employment or training, one of the highest levels in Europe, while youth unemployment has hovered around the 40-per-cent mark for the last three years.

Against this economic backdrop, Boeri says politicians are afraid to tell those lucky enough to have a job that they will face economic hardship in old age unless they start saving more, work longer hours or take other steps.

"We have had 20 years of state cowardice and sloth" on this issue, Boeri said, adding that a fledgling scheme to send future pension calculations to millions of workers is facing "very many obstacles."

"The political class is afraid that this information will hurt them," he added.

"We have to stop terrorizing people about pensions," Cesare Damiano from the ruling Democrats said Thursday. "More prudence and less loquacity would be advisable" from Boeri, Renato Brunetta from the opposition Forza Italia party wrote on Twitter on Friday.

According to INPS's chief, to solve young people's pension blues they need to be offered more stable employment opportunities, and he says this started happening last year, following the introduction of the Jobs Act labour reforms.

Boeri has also proposed giving early retirement incentives to older workers - at the cost of drawing a smaller pension - to make space for younger generations. Not all economists are convinced that this would work.

However, Prime Minister Matteo Renzi is exploring the option. His economic advisor Tommaso Nannicini said Tuesday on the Sky TG24 news channel that "creative efforts" would be needed to foot an expected cost of 5 billion-7 billion euros (5.6 billion-7.9 billion dollars).

"That's not the best way of using so much money," pension expert and former conservative lawmaker Giuliano Cazzola told dpa. "We are thinking too much about old people and too little about young people," he added.

Italy has a two-tier pension system created by another reform in 1995. It abolished over-generous schemes which allowed people to retire on 70-80 per cent of their last salary, regardless of national security contributions, but only gradually.

Now, while older people are covered by the old set-up, pension payments for younger people, often out of a job or with no steady income, are typically much lower, and depend on how much they actually paid into INPS coffers during their career.

Emanuele D'Avenia, a 26-year-old entrepreneur whose start-up organizes children's parties, has taken the situation in his stride.

"I've known for a long time that I will probably get no state pension at all or very little: that's just the way it is," he told dpa. Speaking about his plans for retirement, "I think we have to look after ourselves, and I am busy creating income and activities," he added.

Last update: Sat, 23/04/2016 - 11:12
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