Tuesday, 5 February 2008

2040 will see more people in Italy over age 60 than in working population.

Yet again a New Year surprise for the self-employed in Italy. The latest 'pensions barometer' survey by Aon is published showing Italy to be bottom of 25 (of 27) European countries for 2007.

Some relief was felt by many when Berlusconi left power in 2006, me included, but Prodi has done little in any of the reforms he promised. Since he gained power I have seen my pension contributions rise from 19.5% of income to 23.5% in 2007 and 27% in 2008, and yet according to this new report the country dropped 7 places to the bottom.

Of every €100, €27 goes towards pension contributions, €27% in income tax, €4.25 in regional tax, leaving €41.75.

At present if one was to earn €30,000 per year for 20 years, contributing €8,100 per year, on retirement the state would provide €1200 per month (in todays money). So maybe the state is hoping on greater birth and death rates, should one die before the 10th year of receiving a pension then they have more money to feed the huge politicians pensions whom are eligible after only 8 years of work.

Just over the border in Switzerland one pays 23% income tax (whatever your earnings) and 2% towards your pension. Maybe it's time to learn German.

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