From July 1, a new financial product will be available to young people, allowing them to prepare for their future while helping to protect the planet.
Young people who wanted to find a good financial plan will be delighted. Following the adoption of the green economy law of October 23, 2023, a new financial product is available from July 1, 2024. It is specially designed for young people under 21, but parents are also concerned. They can, from the birth of their child, open an account and deposit up to 22,950 euros into it, as for a Livret A account. In addition, the interest generated by this product is exempt from taxes and social charges.
This is the plan, called the Future Climate Savings Plan (PECF), which offers numerous benefits to these holders. Indeed, thanks to this savings product, young people actively participate in projects intended to reduce the impact of climate change and promote a more ecological future, while increasing their personal savings. For them too, this constitutes an opportunity for financial education: they gradually learn the basics of ethical investment and management of their money.
Regarding the performance of the PECF, it can be very advantageous. In principle, on paper, it depends on the management method and the product selected, and according to estimates, it should be higher than that of the livret A. According to the impact study of the draft law on the green industry, the PEAC could have an annual return of around 5%. However, the saver will have to choose between autonomous management or supervised, but always secure, management.
The Future Climate Savings Plan also proposes to block funds until adulthood, except in the event of disability of the beneficiary or death of one of the parents. From the age of 18, the young adult will be able to benefit from the accumulated money, by withdrawing part of the funds if the PECF has been open for more than five years, i.e. from the age of 13. The account will be automatically closed if the holder decides to withdraw all of the funds.
As for how the PEAC works, it is quite simple: young people can open a PECF account and deposit funds into it regularly, either through planned payments or through one-off contributions. The money saved is then invested in projects and companies with a positive environmental impact, in particular those bearing the Greenfin or ISR (socially responsible investment) label.
This can include initiatives such as renewable energy, biodiversity conservation, sustainable management of natural resources, and many more. By encouraging youth to save responsibly, PECF helps to create a generation that is aware of the importance of sustainability and takes concrete action to protect our planet for generations to come.