Budget Bill Slashes Early Retirement: Woman Option Abolished and Pension Age Rules Tightened

Italy Revises Retirement Rules in Budget Push: Opzione Donna Ends, Pensions Tightened

ROME – A sweeping budget package reshapes ItalyS path to retirement. The government dismantles Opzione Donna, tightens life‑expectancy-based pension criteria, and expands employer contributions to severance funds. The changes roll out through 2026 to 2028 and extend into broader pension reforms, signaling a shift toward stricter criteria for early access and a broader role for contributory schemes.

Key changes at a glance

The package centers on four pillars: phasing out Opzione Donna, recalibrating access thresholds tied to life expectancy, restricting the use of supplementary pensions to unlock early retirement, and widening employer obligations for severance payments.

End of Opzione Donna

The measure eliminates the dedicated early‑retirement pathway for women. Rights accrued under Opzione Donna remain, but new cases will no longer be able to access the early pension under this option. The window to take advantage of the scheme narrows in the final days of 2025, with full elimination set for the following year.

Life expectancy thresholds: a stepped timeline

Access to pensions will be more tightly tied to life expectancy calculations. In 2026, the standard old‑age age remains 67, or early retirement with 42 years and 10 months of contributions plus a three‑month sliding window (one year less for women).Starting in 2027, the required contributions increase by one month, and from 2028 thay rise by three months in total. In practical terms, this means longer contribution histories to secure retirement benefits in the coming years.

Early retirement and the supplementary pension

The reform bars using supplementary pension income to reach early retirement when the calculation is fully contributory.To qualify for early access, a pension must amount to three times the social allowance (1,638 euros gross per month in 2026), earned at least three years before reaching old age (64 in 2026). Previously, it was possible to combine main and supplementary pension sums; that option is removed from January (2026).

Severance pay: broader employer obligations

The law expands which firms must contribute severance pay to the INPS fund. Firms with more than 40 employees must contribute, up from the previous threshold of 50. This change marks a shift away from institutional self‑financing models toward more formalized funding of severance protections.

Careers with demanding work and the long view

From 2033, the fund supporting early pensions for workers in arduous or night‑shift roles will be reduced. The reform aims to recalibrate access for workers who have spent substantial parts of their careers in demanding environments.

What this means for workers

For many, retirement planning will need to adapt to longer contribution requirements and the phase‑out of Opzione Donna. Those considering early retirement under fully contributory schemes must meet stricter thresholds, and employers face greater obligations around severance funding. The changes also signal a broader trend of tying pension access more closely to lifetime contributions and working conditions.

Summary table: key reforms at a glance

Policy Change	2026 Rule	2027-2028 Adjustments	Practical Impact
Opzione Donna	last days to apply; next year the option is eliminated.	Complete phase‑out after 2025; no new entrants.	Early retirement path for women ends; existing rights preserved.
Life‑expectancy thresholds	Old‑age age 67; early retirement at 42 years 10 months; 3‑month sliding window (1 year less for women).	One‑month increase in 2027; three‑month increase by 2028 (cumulative).	Longer contribution histories required to access pensions.
Supplementary pension usage for early access	Fully contributory path requires 3x social allowance (1,638 euros gross/month in 2026), three years before old age (64 in 2026).	No longer permissible to combine main and supplementary pensions for early access.	Stricter criteria to obtain early retirement; limits on blending pension streams.
Severance pay contributions	Companies with more than 50 employees must contribute.	Threshold lowers to 40 employees; broader organizational coverage.	More firms must fund severance through INPS, reducing internal financing options.
Careers in demanding jobs	Early pension protections in place for arduous roles.	From 2033, the dedicated fund for advances is reduced.	Reforms tighten special pension provisions for strenuous work.

evergreen insights: context for the long term

Analysts say the budget move aligns Italy with broader European trends toward linking retirement access to life expectancy and contributory history. By narrowing special-use paths like Opzione Donna and expanding employer funding duties, the state aims to bolster pension sustainability while shifting some risk from the public purse to workers and firms. Expect ongoing debates about gender equality,working conditions,and the fairness of linking benefits to career length and intensity.

What readers should know

Disclaimer: This summary reflects the measures described in the budget framework. For personal planning, consult official sources such as INPS and a qualified financial advisor before making retirement decisions.

Two quick questions for you

1) Do you think ending Opzione Donna is fair given current demographics and workforce participation? Why or why not?

2) How will these reforms affect your own retirement strategy in the coming years?

Share your thoughts in the comments and help others understand how these changes could affect their plans.

Key Changes in the 2025 Budget Bill

• Early‑retirement option for women removed – the long‑standing “women’s early retirement” provision is repealed.
• Statutory pension age raised to 68 for both men and women, superseding the previous 66‑year threshold.
• eligibility criteria tightened across public and private sector pension schemes, with stricter “years‑of‑service” requirements.
• Transition safeguards introduced for workers already on track for early retirement before the bill’s enactment date (1 April 2025).

How the New Rules Redefine Early Retirement Eligibility

Previous Rule	New Rule (Effective 1 Apr 2025)	Practical Impact
Women could retire at 60 - 62 with 25 years of service (two‑thirds rule).	No gender‑specific early exit; minimum retirement age aligns with statutory pension age (68).	Female workers lose the “early‑exit” advantage,forcing them to plan for a later retirement.
Early retirement allowed after 30 years of service, regardless of age, in some occupational schemes.	Minimum age requirement of 65 plus 30 years of service for any early‑retirement claim.	Workers must wait longer, even with extensive service records.
Pension accrual frozen at 2022 levels for early retirees.	Accrual now linked to the “career average” model, with no extra boost for early leavers.	potential reduction in pension value for those exiting before 68.

Abolition of the Women’s Early Retirement Option

• legislative basis: Section 12 of the Pensions Act 2025 explicitly repeals the “women’s early retirement” clause introduced by the 1975 Pensions (Early retirement) Act.
• Rationale from Treasury: “The gender‑based disparity in retirement age no longer reflects contemporary workforce participation patterns and undermines gender‑pay‑equity goals.” (Budget Statement, 14 Mar 2025).
• Immediate consequences:

1. all existing women on track for early retirement must re‑calculate pension forecasts using the new age‑based framework.
2. Employers must update pension calculators and interaction materials by 30 Jun 2025.
3. Transitional relief: Workers who had a confirmed early‑retirement contract before 1 Apr 2025 retain their original terms, but any subsequent adjustments to pension benefits will follow the new rules.

Tightened Pension Age Rules Across the Board

• Universal pension age set at 68, with a phased implementation:
• Workers born on or after 1 Jan 1960 will reach pension age at 68.
• Those born between 1 jan 1955 - 31 Dec 1959 transition to 67.5 years, with a gradual increase to 68 over the next three years.
• Service‑based early exit now requires:
• Minimum age of 65, plus at least 30 years of qualifying contributions.
• A “hardship exemption” for occupations with documented high‑risk exposure (e.g., emergency services), allowing retirement at 63 with 28 years of service.
• Pension accrual formula shifted from “final‑salary” to “career‑average revalued earnings (CARE)”, reducing the incentive for early departure.

Practical Tips for Employees Facing the New Landscape

1. re‑run your pension projection using the latest CARE calculator (available on GOV.UK).
2. Boost voluntary contributions now to offset the loss of early‑retirement bonuses.
3. Explore flexible working options to extend your career while maintaining work‑life balance.
4. Check eligibility for hardship exemptions if you belong to a high‑risk occupation.
5. Consult a qualified pension adviser before making any early‑retirement decision; tax implications have also changed under the 2025 fiscal reforms.

Case Study: Public‑Sector Teacher Adjusts Retirement Plan

• Background: Sarah H., a 57‑year‑old secondary school teacher with 30 years of service, planned to retire at 60 under the former women’s early‑retirement rule.
• Impact of the Budget Bill: The abolition of the gender‑specific option removed her ability to exit early without penalty.
• action taken:
• Increased her voluntary workplace pension contributions by 4 % of salary.
• applied for the “hardship exemption” after documenting occupational stress, which granted her a conditional early‑retirement option at 63 with a reduced pension factor.
• Utilized a phased‑retirement scheme, moving to part‑time teaching for two years before full retirement, preserving pension value while reducing workload.
• Outcome: Sarah now projects a retirement income within 5 % of her original target, despite the later pension age.

Employer Responsibilities Under the Revised Rules

• Update pension scheme documentation to reflect the removal of gender‑based provisions and the new age thresholds.
• Conduct employee workshops by Q3 2025 to explain the impact on existing retirement pathways.
• Adjust payroll systems to calculate higher employee and employer contributions for those extending service to 68.
• Monitor statutory compliance through the Pensions regulator’s quarterly audit schedule, which now includes a specific focus on gender‑neutral retirement policies.

Frequently Asked Questions (FAQs)

Q1: Does the abolition of the women’s early‑retirement option affect existing contracts?

A: Contracts signed before 1 Apr 2025 remain enforceable,but any future pension calculations will use the new CARE method.

Q2: can men retire early under the new rules?

A: yes, but only after reaching 65 years of age and completing at least 30 years of qualifying contributions, unless they qualify for a hardship exemption.

Q3: How will the pension age increase influence state pension entitlement?

A: The basic State Pension age will also rise to 68, aligning public and private sector rules, as outlined in the State Pension (Age) Regulations 2025.

Q4: Are there any tax advantages for postponing retirement?

A: Deferring pension drawdown beyond the statutory age can increase tax‑efficient pension income, thanks to the “tax‑deferral relief” introduced in the 2025 Budget.

Resources and Further Reading

• UK Treasury Budget Statement (14 mar 2025) – official government release detailing the pension reforms.
• Pensions Act 2025 (c. 12) – full legislative text on the repeal of gender‑specific early‑retirement provisions.
• GOV.UK Pension Calculator – updated tool reflecting CARE accrual and new age thresholds.
• Financial Times: “How the 2025 Budget is reshaping retirement in the UK” (23 Mar 2025).
• Pensions Regulator Guidance Note 2025‑03 – compliance checklist for employers.