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COST OF LIVING

Cost of living in Italy to rise again from September

From the food shop to mortgages, life in Italy is about to cost more from autumn, according to a new study. Here's what will squeeze wallets in September.

Published: 12 August 2023 16:49 CEST
Cost of living in Italy to rise again from September
The cost of living is set to rise in Italy from Autumn. (Photo by MARCO SABADIN / AFP)

As summer in Italy draws to a close, families are set to pay an extra 1,601 euros in living expenses over the coming autumn months.

That’s according to a new study carried out by Italian consumer watchdog Assoutenti.

The research focusses on five items that will further pinch the Italian household budget: food, school, mortgages, petrol and eating out.

“Food costs 10.7 percent more than last year, increasing the expenditure on food and drinks of a typical family in the September-December period by a good 205 euros compared to the same period in 2022,” found the association.

As schools reopen their doors in September, families with school-age children should expect to fork out more for stationery products. These are set to increase by an average of 9.2 per cent year-on-year, due to higher raw material prices and higher production costs.

READ ALSO: EXPLAINED: Why doesn’t Italy have a minimum wage?

This means an increase of 50 euros compared to 2022 for supplies, while books are expected to rise by 45 euros on average.

It will also be more expensive to travel by car. With current fuel prices, the cost of filling up at the pump is forecast to rise in the last four months of 2023 by a total of 103 euros per household.

It’s not good news for those paying a mortgage either.

The European Central Bank has already predicted interest rate increases over the last quarter of the year, putting further strain on mortgage payers.

“Assuming an adjustment of the rates by 0.25 percent in the upcoming meetings of the ECB, the expenditure for the monthly installments in the period September-December would be more expensive overall by about 1,170 euro compared to 2022,” adds Assoutenti.

IN MAPS: How Italy’s property prices vary by region

Today, a variable-rate mortgage with an average of 125,000 euros at 25 years costs an average of 60 per cent more than at the beginning of 2022, with the monthly instalment rising by an average of around 270 euros.

It will also be more expensive to eat out in restaurants and bars. This sector is expected to cost an extra 28 euros per family across the four months.

What about electricity and gas bills? They need to be looked at on their own, according to the association. 

The upturn in demand in the autumn months as the weather turns colder could shake up energy prices on international markets once again, with direct effects on Italians’ bills, warned Assoutenti.

“Italians have to get ready for getting stung by sharp increases in prices and tariffs in various sectors,” said president Furio Truzzi.

To counter these soaring costs, families in Italy will be hoping that the government will follow through on an anti-inflation measure, which could lead to a 10 percent reduction in the food shop, including baby products.

The association indicated that such a measure would translate to savings of around 4 billion euros for Italian families.

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For members

PENSIONS

Can you transfer your Italian pension if you move abroad?

If you work in Italy and then move to another country, will you be entitled to an Italian pension - and can you take it with you? The Local asks financial experts how the system works.

Published: 29 May 2024 10:09 CEST
Can you transfer your Italian pension if you move abroad?

For those living in another country long-term, future planning around pensions is often a high priority on the list.

Unlike Switzerland, for example, where working for at least one year makes you eligible for a Swiss pension, or the United Kingdom where the minimum contribution period is 10 years, Italian law stipulates 20 years of contributions in Italy to get the minimum pension amount. This rule applies to all workers, regardless of their nationality.

EXPLAINED: How your Italian pension works

So if you’ve worked in Italy and contributed to a pension, what happens to it if you then move back to your home country, or elsewhere?

The Local asked Emilio Martinotti, tax and business consultant at international advisory firm Ecovis, whether or not it is possible to transfer an Italian pension overseas.

Q: Can a foreign national who is eligible for an Italian pension receive it if they leave Italy?

A: “Yes, it’s possible for a foreigner who is eligible for an Italian pension to receive their pension even if they leave Italy. Italy has bilateral agreements with many countries to ensure that individuals can receive their pensions abroad.

“This includes all 27 EU countries, Norway, Iceland, Liechtenstein, Switzerland, Argentina, Australia, Brazil, Canada and Quebec, Israel, the Channel Islands and the Isle of Man, Mexico, Countries of former Yugoslavia, Principality of Monaco, Republic of Cape Verde, Republic of Korea (posting only), Republic of San Marino, the Holy See, Tunisia, Turkey, USA (United States of America), Uruguay and Venezuela.”

Are there any countries where this is not possible? Do some countries not allow people to transfer foreign pensions?

“While many countries have agreements in place to allow for the transfer of pensions, there are exceptions.

READ ALSO: Pensions in the EU: What you need to know if you’re moving country

“Some countries may not allow pensions from other states, or there may be limitations or restrictions on how pensions are transferred. It’s essential to research the specific regulations of both Italy and the destination country.”

What is the procedure the foreign national has to go through to transfer their Italian pension? What documents must they show?

“To receive their Italian pension, individuals typically need to apply through the appropriate Italian government agency, such as the National Social Security Institute (INPS).

“Foreigners may need to provide documents such as identification, proof of residency or work history, and any relevant information about contributions made to the Italian social security system.”

Is it the same for employees as it is for freelancers?

“The procedure may vary slightly depending on whether someone is an employee, or in the gestione separata (‘separate management’, the INPS scheme used by most partita IVA holders), but the overall process of applying for and receiving the pension is generally similar.”

Is there a cost at all?

“There may be administrative fees associated with processing the pension application, but these costs are typically minimal compared to the benefits received.”

What can people do to make the procedure easier?

“Having all necessary documentation in order and being familiar with the application process can make the procedure easier. Additionally, seeking assistance from knowledgeable professionals or organisations specialising in pension matters can streamline the process.”

When is the foreigner eligible for an Italian pension allowed to draw it? Do they get in when they leave Italy even if they are not at the retirement age? Do they get it for the retirement age of their new country? Or do they get it for the Italian retirement age?

“The eligibility and timing of receiving an Italian pension abroad can depend on various factors, including the individual’s age, contributions, and the regulations of both Italy and the destination country.

“Generally, individuals can start receiving their Italian pension when they meet the eligibility criteria, regardless of their location. However, the amount may be adjusted based on factors such as the cost of living in the new country.”

Have you noticed any problems foreign nationals have when they try to get their Italian pension? Is it difficult?

“Some foreigners may encounter challenges when applying for their Italian pension, such as language barriers, unfamiliarity with the Italian bureaucratic system, or difficulty in gathering the necessary documentation.

“While the process can be complex, seeking guidance from experts or organisations experienced in pension matters can help navigate any issues that arise.”

Please note that The Local cannot advise on individual cases. For more information about how Italy’s pension rules may apply in your circumstances, see the INPS website or consult a qualified tax professional.

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