After two extraordinary years, due to the health crisis, the financial investments of the French should drop significantly in 2022, by around 36%. Here are the products which, in this context, will pull their pin from the game and the others.
Slowdown expected on the financial investments of French households! After two exceptional years 2020 and 2021, in every sense of the word, the savings rate, that is to say the share of gross disposable income that households do not use to consume, should continue to decline in 2022. The outbreak of the health crisis in 2020 had seen it exceed 21%, never before. seen. It fell back 17% at the end of 2021 and should be closer to normal, 14.9%, anticipates the macroconomist Cyril Blesson, partner in the specialized firm PAIR Conseil. (1) which reveals its projections to us.
Consequence: the flow of financial investments by French savers should decline sharply, from 172 billion euros in 2021 (after 191 billion in 2020) 110 billion euros in 2022. That is to say a decrease of approximately 36%. Provided, of course, that there are no new confinements.
What are the investments that will take advantage of this expected decline? Will liquid and secure savings (deposit accounts, passbooks, Livret A, etc.) continue to take the lion’s share? Will life insurance continue on its 2021 spear? Here are some answers.
Will sight deposits remain the big winners?
56 billion euros: according to the estimate of PAIR Conseil, this is the flow to deposits seen last year. For the most part, wages that accumulate in current accounts, fail to be spent or invested. The phenomenon is not new. It is symptomatic of the decline of savers’ appetite for investments that are admittedly remunerated, but increasingly low. But it has been further accentuated by the health crisis, which has slowed down consumer spending.
From this point of view, 2022, if new confinements do not suddenly interrupt the recovery in consumption, should mark the start of back to normal. PAIR Conseil relies on a flow of 34 billion euros to sight deposits, down nearly 40% against 36% on average for all financial investments.
The remunerated bank books, including regulated savings, should hold up better. Still according to the projections of PAIR Conseil, the French will deposit some 41 billion euros, against 51.6 billion in 2021, a decrease of 20%. This in particular thanks to the good performance of regulated savings.
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Regulated savings: the year of LEP?
There is no longer any real suspense. Next Friday, the day of officialization by INSEE of the inflation figure for December 2021, the governor of the Banque de France should recommend that the government apply the formula for calculating the Livret A rate, and therefore increase its net annual return by 0.5 0.8% on February 1. That’s not all, according to Cyril Blesson: this rate should logically be read a second time and exceed 1% next August 1, in order to follow inflation for the first half of 2022, which promises to remain at high levels, above 2.5% on average over one year according to INSEE.
Will this increase be a game-changer for regulated savings? Cyril Blesson thinks so. The Livret A should be the only exception to the general drop in investment flows, from from 16.5 billion last year 18 billion next year by incorporating capitalized interests. This despite a real return, ie corrected for inflation, which will remain largely negative.
It will also be interesting to observe the Popular savings account (LEP). Little known, unloved, LEP will, for the first time, come out of the wake of the Livret A to align its remuneration with inflation in the second half of 2021. Or 2.20% net, subject to confirmation by the government on Friday. With this unbeatable rate for a liquid and secure product, the 8million French eligible, on income criteria, but not yet equipped could review their arbitrations. Provided, of course, that the banks play the game. We anticipate an increase in the LEP collection, especially as the will of the public authorities is to make it the new symbol of popular savings, instead of the Livret A, anticipates Cyril Blesson. However, it will be necessary to look at the reaction of the banking networks, because the clientele eligible for LEP is not necessarily their target clientele.
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Life insurance on its spear
In the spear of 2021 (32.2 billion euros capts according to PAIR Conseil), life insurance should still have a good year 2022, drawn by account units which now represent nearly 40% of gross inflows. It is also necessary that the markets are not too rowdy: we will come back to this. PAIR Conseil anticipates a decrease in collection limit 25%, from 32.2 billion euros in 2021 to 24.2 billion euros in 2022.
Ct euro funds, Cyril Blesson does not share the prevailing pessimism and believes that the 2021 pay cut will be less pronounced than announced by some. This seems to confirm the first rates unveiled.
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There are two main reasons for this, believes the economist: the increase in the Livret A and the maintenance of inflation at a relatively high level: There is a reputation risk for euro funds if the average yield drops too sharply in relation to the Livret A and inflation. Certainly, insurers seek rather to limit collection on euro funds, but they also know that they remain an essential tool for selling unit-linked accounts. They will therefore be careful. What convince savers to continue to supplement their contracts.
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Stock market: many uncertainties
The French and the stock market: a relationship that has never been taken for granted. In the Livret A country, savers have historically had much more trouble than elsewhere (the Anglo-Saxon countries in particular) to invest in vehicles involving a risk on the capital. And when they do, they tend to be pro-cyclical, that is, buy when prices go up and sell when they go down. Result: few individual investors make money on the stock market.
Some observers, however, see a change in mentality. Example: unlike what had happened in 2018, the French did not massively withdraw their marbles when the indices plunged in March 2020, following the first confinement. On the contrary: a new generation of investors jumped at the opportunity to make their first investments, hoping to take advantage of the rebound. Well at a price: the CAC 40 increased by nearly 30% in 2021.
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How will the financial markets behave in 2022? Answering this question is not obvious. There are indeed many uncertainties: on the evolution of the pandemic, global growth, inflation … 2022 will be a year marked by more volatility on the financial markets, recently explained MoneyVox Nicolas Chron, strategist at Zonebourse, who expect a roller coaster year, with oscillations of plus or minus 10%. Cyril Blesson also believes that the financial markets will be disrupted in 2022 and remains very cautious: no prognosis but a working hypothesis, that of a stabilization of the main stock market indices in 2022.
One thing is therefore certain: in 2022, investors will have to be calm. According to the Banque de France, in its half-yearly report on financial risks published on Monday, January 5; the risk of a stock market crisis is very high.
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(1) The figures proposed in this article are provided by the consulting firm PAIR Conseil. They represent the investment flows of individuals, including capitalized interests. They therefore differ from the figures provided, in particular, by the Banque de France in its summaries on household savings.