an unbeatable rate set to increase further in 2023, News/Analysis Savings

French people with modest incomes who do not have a Livret d’Épargne Populaire have every interest in looking into the conditions for opening this booklet to place their precautionary savings there. From August 1, it will no longer yield 2.2% per year but 4.6%, an unbeatable level for this type of secure and tax-free savings product. It is to take into account the levels of inflation observed since the beginning of the year that the government has decided to apply this increase in remuneration which corresponds to the average inflation excluding tobacco for the first 6 months of the year. .

Income limits

The LEP is reserved for low-income households according to income ceilings established according to the composition of the household (for example €20,296 for a single person and €31,135 for a couple). It is the reference taxable income of the year preceding that of the request (or the penultimate) which is taken into account. In other words, the reference tax income for 2020 or 2021 for an opening request made in 2022.

According to the latest estimates from the Banque de France, only 37% of the 18.6 million eligible French people have an LEP actually open despite a record number of openings (824,000) over the first five months of the year. It is especially the youngest who seem to lose interest in it or who perhaps do not have enough savings to invest.

Banks can now query the tax authorities directly electronically to verify that the eligibility conditions are met when the passbook is opened and remain so each year. If your taxable income exceeds the ceiling for one year but falls below the following year, the LEP can indeed be retained. If it is exceeded two years in a row, the bank will have to close it.

2 LEP per tax household

The LEP is reserved for adults residing in France for tax purposes and there cannot be more than two LEPs in the same tax household. At the opening, you must pay a minimum of €30 into your savings account. Its outstanding amount is capped at €7,700, which could soon represent €354.2 in interest per year, compared to €154 if this same sum were placed in a Livret A (at 2% from 1 August). For a household with two LEPs, this can generate a little over €708 in interest, provided it has savings of €15,400.

More than 6% in 2023?

However, reasoning on an annual basis is not very relevant because these rates of remuneration are likely to be revised every 6 months. With the assumption of a new acceleration of inflation this autumn (up to 7% according to INSEE), the interest rates of the Livret A, the LDDS and the LEP will experience a new significant increase on the 1st February 2023, but thereafter the movement could be reversed. From February 1, 2023, the LEP rate could even climb to more than 6%, which offers an additional reason to open one now.