The demographic winter has arrived, and the pension issue no longer concerns only those nearing retirement—it now directly affects today’s thirty-somethings.
In Italy reforms pushing back retirement age and eroding pension value, private retirement savings systems are becoming essential to ensure a sustainable lifestyle and a secure old age for those who entered the workforce around the year 2000.

Yet, as younger generations seem reluctant to face this urgency—and show limited financial literacy—INPS (the Italian National Social Security Institute) has launched INPS for Young People, an initiative designed to educate new workers about their pension rights and responsibilities from the very start of their careers.

Who Are the Millennials?

Millennials are typically defined as those born between 1981 and 1996—a generation that has experienced the digital revolution firsthand and is now facing the challenges of a strained Italian pension system.

Having come of age in the new millennium, this cohort—now between 30 and 40 years old—entered the labor market during or just after the 2008 financial crisis. Their professional paths have often been marked by unstable, discontinuous employment, limited pension contributions, and far weaker retirement prospects than those of their parents.

Pension Reforms and Later Retirement

Workers who began contributing after 1996 fall under a fully contribution-based system, meaning their pension will be calculated solely on the basis of what they pay in—these are known as “pure contributive” workers.

Key changes introduced by the recent Budget Law include:

  • Old-age pension: Set at 67 years with at least 20 years of contributions. The requirement for a minimum pension of 1.5 times the social allowance was eliminated, allowing retirement with as little as €503 per month.
  • Early retirement at 64: Still requires 20 years of contributions, but now the minimum pension must be equal to 3 times the social allowance (up from 2.8). This implies a steady gross income of €2,300–€2,400 per month for 20 years to qualify for a pension of around €1,700 per month.
  • Alternative path: For those not meeting these criteria, retirement is only possible at 71 with at least 5 years of contributions.

Given their career instability, Millennials may realistically expect to retire at around 75.

Generational Comparison

OECD data shows that young Italians may need to work until the age of 71, while the official retirement age in 2024 is already set at 67. But the issue extends beyond just age.

According to the State General Accounting Office, the replacement rate—the ratio of the first pension to the last salary—will fall significantly:

  • In 2020, the average replacement rate was 71.7%.
  • By 2070, it is projected to decline to just 58.9%.

In practical terms:

  • A worker with a gross final salary of €1,800 in 2020 would receive a pension of around €1,291.
  • In 2070, this would drop to approximately €1,060.

Financial Literacy and Pension Awareness

Despite these worrying forecasts, Millennials show limited awareness and engagement with retirement planning.

According to the 2023 Edufin Report:

  • Only 50% of respondents said they understood basic pension-related concepts.
  • Fewer than 50% know how their own pension is calculated.

Among younger cohorts, the situation is worse:

  • Just 34% of 25–34-year-olds understand the contribution-based system.
  • Only 32% of 18–34-year-olds understand how contributions are revalued over time.

This lack of financial literacy, combined with a sense of resignation—fuelled by intergenerational inequities and job insecurity—leads many young people to postpone critical financial decisions.

INPS for Young People

To improve awareness and engagement with Italy’s pension system among younger generations, INPS launched a dedicated initiative: INPS for Young People.

The program aims to simplify and strengthen the relationship between young workers and the institution by providing tailored information and services. These are delivered through channels familiar to the target audience, such as social media and digital platforms.

The initiative offers support in key areas such as:

  • Entering the labor market
  • Managing contribution records
  • Accessing youth-specific welfare benefits and bonuses
  • Navigating pension rights and services

Complementary Pension Schemes: A Necessary Solution

In light of this scenario, complementary pension schemes are no longer optional—they are essential for Millennials.

However, the data tells a troubling story: the generation that most needs pension funds is the least represented.

According to the 2023 COVIP Report:

  • Only 18.8% of members are under 35
  • 9% fall between 35 and 54
  • 3% are 55 or older

From 2018 to 2022, the overall shift was toward older age brackets, while membership among those under 35 grew by just 1.1 percentage points.

Young people, it seems, either cannot—or will not—allocate resources toward their retirement future.

Time as a Strategic Asset

Millennials’ longer time horizon offers a strategic advantage. It enables them to:

  • Optimize long-term participation in pension funds
  • Maximize financial and tax-related benefits
  • Make savings goals more manageable over time
  • Leverage the power of compound interest, which can turn modest early contributions into substantial capital

For these reasons, it is essential that Millennials improve their financial literacy, start contributing early to complementary pension plans, and embrace long-term financial planning that uses time to their advantage.

They must move beyond resignation and take proactive control of their future.

Millennials face a crucial decision: passively accept a system that works against them, or take action to build concrete alternatives for their retirement.

Time is still on their side—but the window of opportunity is narrowing.