Pensions: New Increase of 100 Euros per Month in the Works

What to Expect for Pension Increases: Insights and Forecasts

As explained, in May further pension increases are not expected after those granted in recent months due to the revaluation (the mechanism by which the pension is adjusted to the cost of living) and the revision of Irpef tax rates, which resulted in annual savings up to a maximum of 260 euros.

Future Scenarios and Potential Reform

For upcoming pension increases, we need to wait until July (with the arrival of the thirteenth-month pension) and August (with the possible refund of the Irpef credit resulting from the income tax return).
Beyond that, all eyes are on the next year when, in addition to the new revaluation (presumably at a rate of 1.6%), there could be a new tax reform.

Resources permitting, the government is reportedly working on a further simplification of Irpef brackets and rates, focusing on higher incomes excluded from the last reform.
While the Irpef cut, which reduced the second bracket rate from 25% to 23%, benefits all incomes above 15 thousand euros, no increase is applied above 50 thousand euros.

Initial estimates suggest that the new Irpef could lead to an increase of up to 100 euros per month on pensions, but only for those above a certain threshold (expected to be quite high).

Potential Benefits and Amendments in Irpef

Currently, pensions are subject to a more favorable Irpef withholding tax compared to last year, with a 23% rate applied to the portion of the pension between 15 thousand and 28 thousand euros annually instead of 25%.
This results in various increases in savings.

Regarding the table below, there’s uncertainty about the confirmation of new rates in 2025 as the government needs to secure resources to proceed with the tax reform, aiming to also revise Irpef.

Viceminister of Economy, Maurizio Leo, hinted at extending the bracket from 28 thousand to 50 thousand euros up to 55 thousand euros, potentially providing a yearly increase of up to 660 euros for those with an annual pension between 50 thousand and 55 thousand euros gross.

Moreover, there are talks about reducing the current 35% rate in this bracket to 34% or even 33%, which could raise the annual pension by up to 1,200 euros compared to today.

Implications for Different Income Levels

For pensions below 28 thousand euros, the Irpef cut would not apply.
This situation might disappoint lower-income pensioners who barely benefited from the 2024 Irpef reform and are excluded even in the 2025 forecasts.

These individuals, despite paying lower taxes, are set to miss out on the advantages proposed for higher-income brackets, posing a stark contrast in the upcoming fiscal adjustments.