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QUALITY OF LIFE

Cost of living: How does Italy compare to the rest of the world in 2022?

Italy has recorded lower costs of living than the UK and US so far for 2022 after outstripping both last year. Here's a closer look at how everyday outgoings compare.

How Italy stacks up for cost of living compared to the rest of the world.
How Italy stacks up for cost of living compared to the rest of the world. Photo by MARCO BERTORELLO / AFP

It’s a common belief that the cost of living in Italy is generally cheap and cheerful, and this is often thought to explain the nation’s comparatively low wages.

However, Italy in fact outpaced both the UK and the US for living expenses last year, ranking as the 26th most expensive country in the world.

Good news for those living in or travelling to Italy this year, though – the latest figures for 2022 show that Italy has now slid down the scale, behind the UK and US, coming 32nd in the global ranking, according to Numbeo’s Cost of Living Index for 2022.

It is classified as being cheaper than France (19th), the UK (26th), the US (27th), and the famously expensive Switzerland – which was ranked second most expensive in the world for the second year running. And once again, Bermuda placed first.

The survey was compiled using the notoriously expensive city of New York City as a benchmark. New York was given an index score of 100. So a country with a score higher than 100 is more expensive than New York, while below signals that it is cheaper.

READ ALSO: The parts of Italy where house prices keep rising despite the pandemic

Italy scored 66.47 overall. It has got cheaper for groceries, dropping four places in the global scale and is now around 12 percentage points cheaper than the US, but is still more expensive than the UK.

While people in Italy have seen energy prices surge in January, with a knock-on effect on food prices and other costs, the same has also happened in many other countries.

Italy ranks 34th for a food shop compared to 36th place for the Brits. But it is cheaper than the US (19th), Canada (20th) and Australia (9th).

Compared to its European neighbours, you’ll pay more at the till for your weekly groceries in France (16th), Denmark (22nd) and Austria (26th). On the other hand, Italy is more expensive than Germany (41st) and Spain (54th) for supplies to stock your fridge.

In a separate recent survey specifically focussed on this aspect of living costs, Italy was in fact much higher up the scale for the cost and affordability of a grocery shop.

The findings from Net Credit are based on not just supermarket prices, but they also consider income. Researchers calculated the affordability of a basket of goods in each country as a percentage of the average daily wage.

Italy’s groceries can be expensive when you factor in the average salary. Photo by Axel Heimken / AFP

The shopping basket they surveyed focused on ten staples including breakfast cereal, eggs, cheese, milk and bread.

Factoring this in, Italy ranked 15th most expensive worldwide for the cost of groceries, calculated as being 33 percent of a daily salary.

Common expenditure prices in Italy

  • Milk – €1,15
  • Loaf of fresh white bread – €1,56
  • Local cheese (1kg) – €12,24
  • Beef (1kg) – €14,68
  • Bottle of wine (mid-range) – €5,00
  • Domestic Beer (0.5 litre draught) – €4,50
  • Meal per person at low-cost restaurant – €15,00
  • Three-course meal for 2, mid-range restaurant – €55,00
  • Monthly pass on public transport – €35,00
  • Petrol (per litre) – €1,62
  • Basic utilities (Electricity, gas, water, rubbish) for 85m2 Apartment – €162,79
  • Apartment rent (1 bedroom) in city centre – €588,95
  • Apartment rent (1 bedroom) outside of centre – €449,53
  • Price per square metre to buy an apartment in city centre – €3,092.74

Numbeo’s Cost of Living index, weighs up average estimates for expenses for a four-person family, ranging from clothing, groceries and dining out to transportation, recreational activities and utilities.

And its rent index is based on the costs of renting one- and three-bedroom apartments in and outside of city centres.

For this category, Italy ranked 44th out of 139 entries in total worldwide, compared to 37th last year. It again comes behind Spain, the UK, the US and Canada.

READ ALSO: The ten positives you’ll notice after moving to Italy from the US

Italy was found to be eleven points cheaper than the UK on average compared to eight points last year, and over 20 points cheaper than the US when it comes to rental accommodation.

Photo: Jürgen Scheeff on Unsplash

Restaurant bills – which were found to be higher on average in Italy than France, Germany, the US and the UK last year – have become relatively cheaper in 2022. Italy recorded around six percentage points lower than the UK for dining out, whereas it’s now about the same compared to the US.

It is still much more expensive than Spain, coming in at around 17 points more costly for eating out.

According to Numbeo’s country profile, the average Italian monthly salary after tax is €1,443.39 compared to $3,596.78 (€3,176.10) in the United States and £2,011.40 (€2,400) in the UK.

While salaries are lower in Italy and many living costs don’t differ greatly between Italy, the UK and the US, you can at least bank on a cheaper cappuccino in Italy.

On average, it will set you back €1.40 in Italy, compared to €3.87 in the US and €3.34 in the UK.

These three countries don’t differ that much for a three-course meal for two in a mid-range restaurant, costing between €53 and €59.

Certain produce is more expensive in Italy such as local cheese and meat, but it costs less to use public transport overall.

Monthly utility bills were recorded as being higher in Italy than the US, but not the UK.

READ ALSO: Rising energy prices: How to save money on your bills in Italy

Meanwhile, average private monthly childcare costs in Italy are cheaper compared to the UK and US, based on one child attending full-time.

In its Cost of Living City index for 2022, Milan has ranked the highest for Italian cities coming in at 117th place out of 578 cities worldwide. It’s followed by Parma (148th) and Genoa (149th). Rome came 177th.

Parma recently came first in the country in a survey on the best and worst places to live in Italy. It took the title for its healthcare, work and business opportunities, level of environmental protection, life satisfaction levels and how it managed the Covid-19 pandemic.

READ ALSO: The very best Italian towns to move to – according to people who live in them

Previous European studies have shown the cost of groceries, eating out, internet and communications to be relatively high in Italy.

Within Italy itself, there can be huge regional differences. Broadly speaking, the north of Italy tends to be more expensive than the south, and cities pricier than rural areas.

Milan is notorious for high rents, as are tourist hotspots including central Florence and Venice – and generally speaking people living in these areas will face higher costs for most goods and services.

But average recorded prices are brought down by the fact that it is relatively cheap to rent in small towns and villages, while the cost of services can also be markedly lower outside the major Italian cities.

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MONEY

What you need to know about opening a bank account in Italy

There are a few things to know before choosing the right place to put your cash in Italy. Here’s our guide to finding the best bank for you.

What you need to know about opening a bank account in Italy

Money makes the world go round, they say, and even in notoriously cash-friendly Italy, your life will be a lot easier if you have somewhere to put it.

But with daunting paperwork, confusing opening hours and array of diverse offerings, interacting with Italian banks can be challenging.

Here’s our guide to opening a bank account in Italy to get you started.

Step one: Know what’s out there

I come from Canada, where you can count the number of big banks on one hand. That means Italy’s banking sector can be a little dizzying in comparison. At the time of writing, Italy has more than 20 banks with assets of more than €10 billion. 

Among the biggest names in Italy are Dutch-based ING, Germany-based Deutsche Bank, Italy’s own Unicredit, and the Banca Nazionale di Lavoro (now owned by France’s BNP Paribas).

READ ALSO: Which are the best Italian banks for foreigners?

Alongside these big national banks, there are regional providers like the Banca Popolare di Puglia e Basilicata or the Banco di Sardegna, which confusingly operate branches far from their respective homelands. As a result, it’s not uncommon to find a Pugliese bank next to a Venetian one in Lombardy, or encounter a local bank that has just a handful of branches throughout the country.

Consider the fees applied to transactions and cash withdrawals when choosing your Italian bank account. (Photo by ANDREAS SOLARO / AFP)

Disrupting the banking world in recent years has also been the emergence of a whole new crop of online banks, like N26 and HYPE, which offer very low fees by operating no physical branches.

And lastly, there’s the post office: Poste Italiane, in an unholy alliance of paper-based bureaucracy, also operates a consumer bank notorious for slowing down postal lines everywhere.

Knowing the lay of the land will help you pick out the best offering for your life and location. Consider your choice carefully. When we arrived, we chose N26 for its low fees and easy sign-up. But soon, we needed a bigger bank that could offer services like a fideiussione (renter’s guarantee).

Choosing the right bank is about more than knowing if it has a branch in your area — as you settle, a bank’s mortgage offerings, insurance, or high-interest savings accounts may become more important to you.

Step two: Decide what account you need

Technically, if you’re over the age of 18, you’re eligible to open an account in Italy — but most account types are only available to residents, which includes foreign nationals who are here because of a valid job offer or degree program.

The most common account type is a conto corrente or current account (a checking account for American readers). These accounts are designed with daily transactions in mind, meaning there are often opportunities to save on fees by maintaining a minimum deposit or balance.

Ask an expert: Which are the best UK banks for Brits living in Italy?

To earn higher interest, you can place your savings in a conto di risparmio or savings account, which offer fewer transfers and transactions in exchange for higher interest. There is also the conto di deposito, a more restrictive but even higher-interest savings account designed for parking your money just to earn.

Lastly, there are conti correnti esteri, foreign accounts, which can offer deals on wire transfers or allow you to use your home currency and save on exchange fees. These accounts don’t require you to be an Italian resident, making them a good choice for people staying for an indeterminate time.

Step three: Review costs

There’s a reason some of Italy’s nicest buildings belong to banks — this country’s banking fees are among the highest in Europe.

Though comparisons are hard to come by, in 2009 the European Commission found that fees in Italy could be four or five times the amount for the same accounts in the Netherlands, Ireland, or Germany.

But choose the right offer, and they don’t have to be — one analysis found these fees could vary by as much as 10 times between banks.

On average, a typical current account cost nearly €95 per year in 2022, with high-interest savings accounts costing even more. But that average dropped to just €25 for online-only accounts like those offered by N26.

A branch of Unicredit bank in Milan. (Photo by FILIPPO MONTEFORTE / AFP)

In exchange for these fees, banks offer a range of different services — everything from higher interest to lower transaction fees.

Most banks won’t charge a setup fee, but may charge to issue you with your first debit or credit card. Other services, like cheques, wire transfers, or even ATM withdrawals above a monthly limit are likely to be met with other fees.

Il Sole 24 Ore, one of Italy’s leading financial newspapers, has an online tool that will help you compare bank offers, automatically deducting your expenses from your anticipated interest to show you exactly how much your account is likely to cost.

Make sure to read the fine print — some “fee-free” accounts are promotional offers and expire after a year or so, leaving you paying hefty fees. Others look expensive, but are free if you maintain a low minimum balance or make monthly deposits of just a few hundred euro.

Step four: Visit a branch or sign up online

Now that you know the account type and bank you’re looking for, you can dive into the paperwork.

For a variety of reasons, it’s generally best to wait until you are in Italy to open your account — even in the case of online accounts or conti esteri. Banks will want to mail you your card and know a fixed address in Italy, and you will need an Italian tax code (codice fiscale) to get started in any case.

For online accounts like N26 and HYPE, paperwork is often minimal and requires filing out a few online forms and uploading your ID. 

In physical banks, by contrast, it can be quite extensive, involving a lot of fine print in Italian. If your language skills are poor, consider bringing a friend who can help you review your contracts, or select a bank that you know offers counter service in English.

To open an account, you’ll need the following documents:

  • ID or a passport;
  • Codice fiscale;
  • Residency permit (or, if you’re a non-resident, proof of address like a bill or piece of certified mail); and
  • Proof of your employment income (i.e., a contract or tax return).

Businesses will also need to provide the company’s registration certificate, a certificate of good standing, and statements of the financial status of all shareholders with more than a 20 percent stake in the company.

Take these to your local branch to get the process started. Make sure to check your local bank’s opening hours first — Italian banks are notorious for taking long lunches and closing early in the afternoon.

Closing an account

If you’ve decided it’s time to say goodbye to your bank, it’s unfortunately not quite as simple as visiting a branch.

In most cases, you will need to send a registered letter or raccomandata to your local branch before you show up in person, including signatures from everyone on the account.

And as usual, make sure to read your contract carefully — some banks will even charge a fee to close your account.

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