This investment is also suffering the full force of competition from the Livret A booklet, which is more profitable, totally tax-free and free of charge.
Inflation is definitely hurting the life insurance fund in euros. Net subscriptions (deposits less withdrawals) on this flagship investment in French savings fell again in October over one year, to -2.4 billion euros, according to the French Federation of Insurers.
Since the beginning of the year, this pocket of guaranteed capital within life insurance has suffered a net outflow of 17.1 billion euros. A rarely seen level. In question, yields now around 1.2%, which do not make it possible to compensate for inflation (6.2% in October). Savers who place their woolen stockings on this medium lose money. And that’s not all: this placement is also suffering the full force of competition from the Livret A booklet, which is more profitable, totally tax-free and free of charge. The French rushed to this booklet with the rise in remuneration to 2% in August.
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Livret A more liquid
Deposits have broken records in recent months – with the exception of October, the traditional outflow month. Since the beginning of the year, the cumulative net inflow is 30.60 billion euros. “Savers choose to saturate their savings accounts”confirms Cyrille Chartier Kastler, founder of the specialized site Good Value for Money.
It’s not the only reason. The booklet A is especially very liquid. “If you urgently need money, the withdrawal is immediate”, continues Cyrille Chartier-Kastler. The delays are longer for life insurance. ” There is no cannibalization of life insurance by the livret A, replies Franck Le Valois, managing director of France Assureurs.Life insurance has no ceiling or limitation on the number of contracts per person. Nevertheless, the announcements of an increase in the rate of the livret A can have a psychological effect and occasionally create a call for air. »
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Yields on the euro fund are still expected to rise in 2022, to between 1.6% and 2%. But those of booklet A also. Professionals are counting on a rate of around 3% on the 1er february. This should continue to fuel the battle between these two investments.