Has the price surge slowed down? Yes. But prices are still increasing, at the end of 2023. And if inflation fell to 3.5% in the month of November, the annual average for the year 2023 will be almost 5% according to INSEE. For what impact on your taxes, your retirement pensions, your social assistance, your salary or even your savings?
Disinflation on track: this is how INSEE titles the latest of its quarterly economic notes, published in mid-December. Translation: inflation is still present, but it is slowing down and the year 2024 will probably be the year of a return to more normal price increases. It has just fallen by 3.5% in the month of November 2023 compared to November 2022. And INSEE anticipates 2.5% inflation from spring 2024. The Banque de France is counting on prices stabilizing around an increase of 3.5% over the coming year.
In the meantime, over one year, by comparing 2023 prices to 2022 prices, INSEE forecasts inflation of 4.9% on average annually, which will follow the 5.2% in 2022, an unprecedented level in the 21st century (see the table below). This lasting increase in prices leads to a whole series of increases, from wages to social assistance, including retirement and taxes. Point.
Smic: +1.13% as of January 1, almost 1,400 euros net per month
The minimum wage increases, as usual and automatically, on January 1st. By 1.13% precisely, 1398.69 euros of monthly net salary for full time and 1766.92 euros gross. The revaluation of the minimum wage is mechanical, to follow inflation: both once a year, on January 1, but also during the year if the price increase borne by the lowest 20% of households exceeds 2% in some months. Thus, the minimum wage certainly does not increase by 5% in January 2024… but it has already increased by 2.22% in May and by 1.81% in January 2023.
- How much? 1398.69 euros net, up 1.13%
- When? As of January 1, 2024
Minimum wage: bad news, the net minimum wage will not exceed 1,400 euros on January 1, 2024
Salary: towards a new (non-automatic) increase of around 4%
Automatic increases in the minimum wage do not push low wages or higher wages in such an automatic way. From now on, prices will increase less quickly than wages, predicted the governor of the Bank of France, Franois Villeroy de Galhau, on France Inter on December 19. Forecasts in recent months have led to a continuation of recent average increases close to 4% per year (3.9% to be exact). INSEE expects salaries to increase by more than 3% in 2024, but above all anticipates greater use of the Macron bonus (value sharing bonus) at the very end of 2023.
The rule should, however, be an increase in a majority of companies: the employers’ organization CPME affirms that 55% of the managers it interviewed are planning an increase in January 2024.
- How much? Nearly 4%, according to initial estimates
- When? Early 2024
RSA, activity bonus, family allowances… +4.6% on April 1?
The high inflation observed in 2023 leads to a revaluation of legal benefits on April 1, 2024 of 4.6%: extract from the explanatory memorandum of the Social Security financing law for 2024. Is this increase frozen in the marble though? No. This was an estimate from Bercy established in September 2023. However, as shown by the correction made on pensions (+5.3% instead of 5.2% anticipated), the regulatory calculation formula does not confirm always forecasts to the nearest decimal point. The final percentage will only be known once INSEE has revealed the consumer price index for January 2024. Thus the revaluation of RSA, activity bonus and other social benefits could result in another percentage. But it will definitely be close to 4.6%.
| Average inflation at the end of January* | Annual revaluation on April 1 | Anticipated revaluation on July 1st | |
|---|---|---|---|
| 2019 | 1.6% | 0.3% | – |
| 2020 | 0.9% | 0.3% | – |
| 2021 | 0.1% | 0.1% | – |
| 2022 | 1.8% | 1.8% | 4% |
| 2023 | 5.6% | 1.6% | – |
| 2024 (estimates) | 4.6% | 4.6% | – |
* Measure of inflation used for the revaluation of family benefits, i.e. the 12-month average stopped in January of the year of revaluation, compared to that of the previous 12 months.
Source: report of the Social Security Accounts Commission – 2022 results and 2023-2024 forecasts
- How much? 4.6%, according to initial estimates
- When? As of April 1, 2024
Small salary: why your CAF bonus risks falling in 2024
Basic pension: +5.3% for January 2024
Same principle as for social benefits but with a different timetable: your basic retirement pension increases every year in January. In accordance with the mathematical formula, based on inflation over the last 12 months stopped in October 2023, Retirement Insurance will increase your pension from the general scheme (Carsat, Cnav, SRE, etc.) by 5.3% in January, as a ministerial instruction has just confirmed.
| Average inflation at the end of October * | Annual revaluation on January 1st | Anticipated revaluation on July 1 | |
|---|---|---|---|
| 2019 | 0.9% | 0.3% | – |
| 2020 | 0.2% | 0.3% (1% for pensions under 2000) | – |
| 2021 | 0.4% | 0.4% | – |
| 2022 | 1.1% | 1.1% | 4% |
| 2023 | 4.8% | 0.8% | – |
| 2024 | 5.3% | 5.3% |
* Measure of inflation used for the revaluation of basic pensions, i.e. the 12-month average stopped in October of the year preceding the revaluation, compared to that of the previous 12 months.
Sources: ministerial instruction and report from the Social Security Accounts Commission
Supplementary pensions are increasing at a different pace: the Agirc-Arrco pension has thus increased by 4.9% in November. We will now have to wait until next fall to benefit from a further increase.
- How much? 5.3% for basic pensions
- When? As of January 1, 2024
Retirement: the pension increases awaiting you for 2024
Minimum old age: +5.3% in January
The solidarity allowance for elderly people (Aspa), or minimum old age, is currently a maximum of 953.45 euros per month for a single person and 1480.24 euros for a couple. This allowance, equivalent to the RSA for seniors, varies if you have additional income. The increase (just like survivor’s pensions or widowhood allowance) follows the same pace as the basic pension, therefore 5.3% in January. The Aspa will therefore exceed 1000 euros for a single person, almost 1004 euros, and almost 1559 euros for a couple.
- How much? 5.3%
- When? As of January 1, 2024
Housing allowances: autumn 2024
APLs increased by 3.7%, on average, as of October 1, 2023. But the parameters of the APL [les modalits de calcul] have in fact increased by 3.5% in line with the latest change in the rent reference index, as confirmed by the National Family Allowance Fund MoneyVox in the fall. This 3.5% increase corresponds to the rate used for the rent shield intended to protect tenants from excessively significant increases. This cap on rent increases extends until summer 2024.
The revaluation of APL, during 2024? It will be in October. And it will probably once again be around 3.5% since the formula for calculating housing allowances is based on the rent index… which has capped at 3.5% in recent months thanks to the rent shield.
- How much? Probably around 3.5%, new
- When? As of October 1, 2024
Land tax 2024: +3.9%, at least
Are you the owner? Do you know the harmonized consumer price index (HICP)? This hitherto unknown index has benefited from a spotlight following the very sharp increase in property tax in 2023. Indeed, it is on the basis of this index calculated by INSEE which does not take into account the cost of housing for owners as the basis for calculating your property tax is calculated each year. More precisely on the basis of the November HICP, which was unveiled in mid-December by INSEE yesterday: +3.9%.
Please note: this does not mean that all property taxes increase uniformly. If your city or intermunicipality does not change its tax rate, then your property tax will increase by almost 4%. There would need to be a clear reduction (roughly equivalent to 4%) in the local rate for your property tax to remain stable.
- How much? 3.9% at least (generalized increase in tax bases)
- When? On local taxes 2024
Local taxes: here is a first indicator of importance for your 2024 property tax
Income tax: here is the 2024 scale
Each year, the income tax scale is revalued according to the inflation forecasts known for the presentation of the finance bill at the beginning of autumn. Last September, Bercy expected 4.8%, which is quite close to reality since INSEE ultimately estimates annual inflation at 4.9%.
Consequently, the thresholds of the income tax scale increase by 4.8%, compared to 5.4% last year. The impact for your tax? Avoid a significant increase. As the threshold for the first tranche increases from 10777 to 11294 euros, the share of your income taxed at 0% is greater. Mechanically, with the increase in thresholds, your tax falls if your salaries, pensions or other resources do not increase.
| Income bracket by tax share | Rate applicable for the tranche |
|---|---|
| Up to 11294 | 0% |
| From 11295 28797 | 11% |
| From 28798 82341 | 30% |
| From 82342 177106 | 41% |
| More than 177106 | 45% |
Barme included in the finance law for 2024.
- How much? Revalued scale of 4.8%
- When? As of January 1, 2024
Taxes: how much less will you pay in 2024 with an inflation index scale?
Booklet A, LEP, PEL… In scattered order in January and February
Are you little or no taxable? Do you know that you are probably entitled to the one and only guaranteed capital investment, completely tax-free, whose return follows inflation? The Popular Savings Booklet will still earn you 6% in January 2024, before a drop to around 4% in February 2024 and perhaps 2.5% or 3% in the summer of 2024. The Livret A will remain blocked at 3% in 2024 and the PEL sees its remuneration increase by 2.25% in the event of opening in 2024.
- How much? 4% for the LEP, and 2.25% for the PEL
- When? On February 1, 2024 for the LEP, on January 1 for the PEL
Two years in a row 5%? Said in the 21st century
5% is almost twice as high as the highest of all annual inflation measures since 2000: 2.8% in 2008 in the midst of the financial crisis of subprime. So, two years in a row 5% or more…
INSEE archives go back to 1991 and the highest mark before the unannounced 2022-2023 doublet is 3.2%, in 1991 precisely. Beyond that, the last lasting period of very high inflation dates back to the early 1980s, when prices rose by more than 13% per year.
| Anne | Inflation rate |
|---|---|
| 2023 | 4.9% (provisional rate) |
| 2022 | 5.2% |
| 2021 | 1.6% |
| 2020 | 0.5% |
| 2019 | 1.1% |
| 2018 | 1.8% |
| 2017 | 1% |
| 2016 | 0.2% |
| 2015 | 0% |
| 2014 | 0.5% |
| 2013 | 0.9% |
| 2012 | 2% |
| 2011 | 2.1% |
| 2010 | 1.5% |
| 2009 | 0.1% |
| 2008 | 2.8% |
| 2007 | 1.5% |
| 2006 | 1.7% |
| 2005 | 1.7% |
| 2004 | 2.1% |
| 2003 | 2.1% |
| 2002 | 1.9% |
| 2001 | 1.6% |
| 2000 | 1.7% |
Annual inflation (one year compared to the previous one) – Insee