Italy. An ageing country with low level of private pension schemes but high homeownership rate

The current Italian population amounts to about 60.7 million of people and its size is expected to increase by 3.5% in 2050. This is the joint result of a negative natural dynamic (number of births lower than number of deaths) and a positive migration dynamic (number of emigrants lower than number of immigrants). This time trend is divergent from the one of the European context, which is instead expected to decrease by 0.1% in 2050. The table above also confirms the specific feature of the age structure of the Italian population, which is well known as one of the oldest among the EU members. Italy has, in fact, the highest old age dependency ratio among all members of EU 28, this ratio is about 32.9 and it is much higher than the EU median (about 27.3). Given the projections of the population for the next three decades, it is also reasonable to think that this indicator will grow up in the next future. Indeed, according to Istat (2011) the population is destined to get gradually older with an average age increasing from 43.2 to 49.8 in 2050. Particularly, the number of old people will rise consistently: the group of individuals aged 65 and older will increase from the actual 21.2% up to about 33% in the next three decades. This age structure transformation will clearly imply an additional pressure of the old age over the working age population; the dependency ratio should reach the 52.9% in 2050. As far as homeownership rates are concerned, Italy ranks in the middle of the distribution made by the 28 country members. 73.2% of the Italian households own the house in which they live, a slightly lower share than the EU median that is about 74.5%. However, Italy shows the highest ownership rate if compared to the other EU countries with the highest GDP. It is important to notice here that the share of owner-occupation households in Italy is significantly lower than it was in 2009, year in which it amounted to 80%. A decrease in part due to the difficulties encountered by young couple in obtaining a mortgage for buying the first home. This decrease signals an inversion of the trend that took place between 2001 and 2011. During this period the number of households living in their own home increased by 13%. The actual reduction in the homeownership rate is reflected in the negative sign of the variation of total outstanding residential loans between 2012 and 2014 and in the reduction of residential mortgage debts. In this stagnant scenario, however, the mortgage market seems to get better. According to ABI (Italian Banking Association), the supply of new residential mortgages increased by 31.4 in 2014 compared to 2013. Among the determinant of this increase there can be the fiscal incentives for the first home purchase introduced in 2014 (lower indirect taxes), the decline in mortgage interest rates, and the reduction of house prices. These data emphasize that Italy is among the most interested countries in adopting ERS. In this country, such schemes are not very popular. Prestito Vitalizio Ipoteario is the only kind of ERS that exists in this country; it was introduced in 2005 and regulated in 2015. It is a form of long-term non-finalized loan that must be refund after the contractor’s death and target people aged 60 or older and owner of a residential property. Currently, only one bank – MPS - provides this product.