Even if the official decision is not expected until around January 15, the Livret A rate should increase from 3% to 2.5% on February 1, announced the general director of the Caisse des Dépôts (CDC) Éric Lombard. , on Radio Classique. Theoretically revised every six months, the rate was set at 3% until the end of January 2025 by the former Minister of the Economy, Bruno Le Maire.
The reason? The formula for calculating the Livret A rate, also valid for the Sustainable and Solidarity Development Livret (LDDS), is based half on the evolution of prices over the last six months and the other half on an exchange rate between banks. However, if the level today is higher than inflation, it nevertheless remains lower than what savers could have had if the theoretical calculation formula had been strictly applied.
The fact remains that the Livret A remains a risk-free investment and net of all forms of taxes, which makes it very attractive compared to other savings products offered by bankers and insurers. However, regulated investments have for several months found themselves in competition with other products with guaranteed capital such as euro life insurance funds or even term accounts.
In September, savers deposited barely 210 million euros more into their savings accounts than they withdrew. This is the worst result for this investment since 2021. For its part, the outstanding balance of the Sustainable and Solidarity Development Booklet (LDDS) has practically not changed. It is true that traditionally, the month of September is not conducive to saving. Households generally have additional expenses linked to paying taxes and going back to school. However, the French, even if this is very unevenly distributed, had, at the end of September, 584.4 billion euros in their Livret A and LDDS accounts, unheard of.
However, conversely, life insurance is doing very well. According to a press release from France Assureurs published at the beginning of the week, the gap between deposits and withdrawals, the net collection, reached 2.5 billion euros in September. This is the second best performance in the last fifteen years. In detail, life insurance contracts recorded last month a record level of contributions for the month of September, at 12.3 billion euros, an increase of 10% over one year. The level of benefits which include in particular buyouts and payments in the event of death, at the same time showed a drop of 12%, to 9.8 billion euros.
Ultimately, since the start of the year, life insurance contract holders have deposited 21.3 billion euros more than they have withdrawn, bringing the total outstanding to 1,977 billion euros. euros at the end of September.
“The French save a lot,” insisted Éric Lombard
The French have the temperament of ants! The financial assets of households in France amounted to 6,267.6 billion euros at the end of March, according to figures from the Banque de France, i.e. almost twice France’s public debt and almost three times higher than the entire market capitalization of CAC 40 companies. “No doubt economic decision-makers would like the French to save a little less and consume a little more, that would support growth,” explained Éric Bompard.
In addition, this financial reserve of the French could attract the desires of certain parliamentarians during the examination of the finance bill for 2025 where all means are good to obtain additional revenue here or there.
Already an amendment by Republican Right MP Véronique Louwagie has been adopted in the Chamber on the end of the inheritance exception for life insurance. In September, the Court of Auditors published a report on inheritance tax, in which it criticized the tax regime for life insurance, deemed “more advantageous than common law” while emphasizing that these exemptions essentially benefit households with significant heritage.
This regime now allows a total tax exemption from inheritance tax when the insured pays premiums before the age of 70, up to a limit of 152,500 euros per beneficiary. Beyond this amount, the sums transmitted are subject to a flat-rate levy of 20% for the portion between 152,501 euros and 852,500 euros and 31.25% for the portion which exceeds 852,500 euros. This amendment provides for aligning the taxation of life insurance with that of inheritance, i.e. 20% up to 552,324 euros instead of 700,000 euros, 30% up to 902,838 euros, 40% up to 1,805,677 euros and 45% above 1,805,677 euros.
It now remains to be seen whether this provision will be retained during the final budget vote?