With inflation reaching 5.8% over one year in June, 80% of French people want the Livret A rate to follow the rise in prices, according to a survey carried out by YouGov for MoneyVox. The new Livret A rate, applicable from August 1, is to be announced this week by the Banque de France.
It’s a certainty. The Livret A rate will be revalued from August 1st due to inflation. The Governor of the Banque de France has affirmed that the favorite savings product of the French would indeed see his compensation increase in the middle of the summer. But how big will this increase be?
The very complex calculation formula gives a remuneration of Livret A 2% versus 1% today. Clearly insufficient according to the French interviewed in a survey produced by YouGov (1) the MoneyVox application. 80% of respondents want the Livret A rate to follow the rise in prices which reached 5.8% in June over one year, according to INSEE figures.
No question of touching the tax advantages…
Indeed, even with a 2% revaluation of the Livret A rate, its real return, corrected for inflation, would be 3.8%. In other words, on 100 euros placed on a Livret A, your purchasing power after one year is only 96.2 euros.
Despite everything, and this is one of the other lessons of this survey, the French remain very attached to the Livret A, a bicentenary product created in 1818, and unique in the world. 73% say against its eventual deletion. The Livret A has become totem and touching it is potentially very risky. Even if this savings product is very unequal.
There is a kind ofEpinal image from Livret A, a savings product for small people, explains the economist Cyril Blesson. However, its outstanding is very concentrated and massively held by the richest. It is a form of tax shelter. Indeed, the interests of the booklet A are not taxable. An exemption which will cost more than one billion euros per year in the coffers of the State with the increase in the rate of the Livret A scheduled for August 1st.
With the Livret A, you benefit from a large tax niche (and it costs more than a billion)
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…Even if they benefit the wealthiest
According to the results of the YouGov survey, 75% of respondents are against a tax on interest 30%, via the application of the flat tax, as are most savings products.
No question of attacking one of the advantages of the Livret A, nor even of touching its universal character. More than half of those questioned want the wealthiest households to continue to benefit from it, even if it is the latter who benefit the most. In fact, only 7% of Livret A savings accounts exceeded the payment ceiling of 22950 euros end of 2020.
Although the number of households with the means to pay 22,950 euros in savings into their Livret A savings account is limited, 58% of respondents believe that the ceiling should increase. This is what President Franois Hollande had in mind when he arrived at the Elyse in 2012. He had raised the ceiling from 15300euros 22950euros, a first stage which was then to bring him 30,600 euros. A doubling of the ceiling which ultimately did not take place. The Court of Auditors had found that this increase, ultimately limited to 50%, had again mainly benefited the wealthiest.
Another lesson from this survey, the idea of merging the Livret A and the Livret de développement durable et solidaire (LDDS), which have the same characteristics (taxation, rate, availability, etc.), is far from unanimous. The French are rather against the idea of making regulated savings more transparent.
Phenomenon, national totem… The underside of Livret A, this unique savings product in the world
(1) The survey was carried out on 1,003 people representative of the French national population aged 18 and over. The survey was carried out online, on the YouGov France proprietary panel, from June 17 to 20, 2022.