The Popular Savings Booklet was full in October thanks to the raising of its ceiling, a historic performance which contrasts with the sharp stop suffered by the Livret A. Deposits exceeded withdrawals by 4.77 billion euros last month on LEPs, reserved for low-income households, according to data published Tuesday, November 21 by the Caisse des Dépôts (CDC).
63.8 billion in outstandings, a record
The total outstanding amount of some 10 million savings accounts has now reached 63.8 billion euros, an unprecedented figure. This historic success coincides with the raising of the ceiling on October 1, from 7,700 euros to 10,000 euros, announced in mid-July by the Minister of the Economy Bruno Le Maire. In 2022, almost half of LEPs (47%) had reached or exceeded their ceiling, according to the Banque de France.
Savers able to do so have every reason to switch their savings in favor of the LEP: it offers a remuneration rate of 6% net, without taxes or social security contributions. After an already perceptible slowdown in September, Livret A and Livret de développement durable et solidaire (LDDS) saw a record drop in their outstanding amounts last month, of 4.44 billion euros. These two savings accounts offer a less attractive rate than the LEP (3%) and, although they remain competitive with life insurance, they now face competition from banking products such as term accounts.
The month of October is also a less buoyant month in terms of savings, particularly for owners who pay property tax, up 9.3% in one year in the 200 largest cities in France, according to the National Union of Real Estate Owners (UNPI). For example, October was the only month of withdrawal for the Livret A (when withdrawals were higher than deposits) last year.
If inflation, measured at 4% last month by INSEE, is also weighing on the saving capacity of the French, the year 2023 remains no less historic for all regulated savings products. The outstanding Livret A and LDDS – 546.7 billion euros combined – has increased by almost 37 billion euros since January. This level has not been reached over a full year since 2012.
The LEP outstanding, in decline since its peak in 2008, is more than recovering: its net collection amounted to 8.28 billion euros last year and almost double, 15.87 billion euros, since January. Its very advantageous rate and the 1.8 million new LEPs opened since January, according to the Banque de France, fully contribute to this.
The latter aims to reach 12.5 million holders in the summer of 2024, out of the 18.6 million eligible people identified by the General Directorate of Public Finances. However, there is one obstacle to its democratization: only people declaring up to 21,393 euros of tax income for a single person, or 32,818 euros for a couple (two shares) are eligible.
Promotion of LEP by the government
The opening of the LEP is a hobby horse of the Minister of the Economy Bruno Le Maire and the governor of the Bank of France François Villeroy de Galhau. For more than a year and a half, they have increased their number of speeches to ensure its promotion, particularly during the announcements of regulated savings rates every six months.
This significant flow towards regulated savings is not always good news for the banks, which pay part of the interest at the end of the year, but arouses the appetite of parliamentarians in search of budgetary pockets. The 2024 draft budget contains an amendment tabled by three deputies Horizons, Renaissance and LR allowing savings from Livrets A to finance companies in the French defense industry, particularly small and medium-sized ones.
The text will be discussed in the Senate chamber from November 23. Livrets A, LDDS and LEP are guaranteed by the State and exempt from taxes and social security contributions. They are also completely liquid, meaning that each holder can withdraw all or part of their funds at any time.