Insights

Italy Snapshot

Italians are heavily reliant on the state pension to fund their retirement
Strong financial support for the family may have unintended consequences
A government-led education and communication campaign is urgently needed

Antonio Iaquinta

Institutional Business Development

01 October 2018

The role of workplace and private pensions is growing across the world.

In Italy, reforms are already underway that mean the generous first pillar state pension will not remain the same forever. This means individuals will carry greater responsibility for funding their retirement in future via second pillar pensions.

To understand how well prepared people are for their retirement, and how this compares across countries with different pension systems, we conducted a survey to get the thoughts of people both pre and post retirement.

In this report we take a look at Italian workers’ attitudes as they approach retirement, and how they feel once they have entered retirement.

Here’s a preview of a few of the findings:

Heavy reliance on the state pension

Most retired Italians rely solely on the state pension for their retirement. Only one quarter of respondents have other sources of income in retirement — 20% have income from defined contribution (DC) company pension schemes and just 5% have a source of income from a private pension.

This is quite a unique position when compared to the other countries in our survey that have mature DC pension systems — a much greater percentage of Italians are reliant on just the state pension.

Related Content

Retirees are missing out on their ‘golden years’

Retirees in Italy are also the least happy when it comes to being able to afford the lifestyle they want in retirement, according to our survey. Almost 50% of retired respondents stated they are unhappy with this aspect of retirement, the highest out of the eight countries we examined (note that due to rounding, percentages in the below chart may not sum to 100).

Strong financial support for the family

When asked what working Italians thought would be their biggest expenditure in retirement, a family-oriented culture came top of the list. This was confirmed by retirees, with 47% of recent retirees and 55% of those later in retirement using their retirement savings to help children and grandchildren financially.

Whilst this appears wholly positive, it can also lead to people not taking ownership of their financial preparation for retirement. The family safety net is important from a cultural perspective but could it result in younger people not engaging with their private savings?

What does this mean for sponsors, schemes and the wider industry in helping members to achieve better retirement outcomes?

Disclosures

The views expressed in this material are the views of SSGA Defined Contribution as of September 10, 2018, and are subject to change based on market and other conditions.

This document contains certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance, and actual results or developments may differ materially from those projected.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. Investing involves risk, including the risk of loss of principal. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

Diversification does not ensure a profit or guarantee against loss.

State Street Global Advisors Global Entities

2241920.6.1.GBL.RTL

Exp: July 31, 2021

Questions? Feel free to

Twitter LinkedIn YouTube SPDR Blog

This information is for informational purposes only, not to be construed as investment advice or a recommendation or offer to buy or sell any security. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment manager or to invest in a fund. Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors. SSGA does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Investing entails risks and there can be no assurance that SSGA will achieve profits or avoid incurring losses.

Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.

Images of NYSE Group, Inc. are used with permission of NYSE Group, Inc. Neither NYSE Group, Inc. nor its affiliated companies sponsor, approve of or endorse the contents of this program. Neither NYSE Group, Inc. nor its affiliated companies recommend or make any representation as to possible benefits from any securities or investments.