The Livret d’Epargne Populaire rate should drop to 6.1% in February, News/Analysis Savings

French people with modest incomes who do not have a Livret d’Epargne Populaire (LEP) have more interest than ever in paying attention to the conditions for opening this booklet to place their precautionary savings there. This booklet now yields 4.6% per year, an already unbeatable level for such a secure, liquid and tax-free savings product. But this remuneration will increase further because its particularity is to be directly calculated in relation to inflation, in order to protect the savings of low-income households.

The next revision of the LEP rate is scheduled for February 1, 2023, at the same time as that of the Livret A and the LDDS. According to our calculations, the level of inflation used from July to December should ultimately show an average of 6.1%. The LEP rate of return thus has a good chance of being increased to 6.1% on February 1, 2023, which would still yield €469.7 in interest over one year for a booklet filled to the ceiling (€7,700) , compared to €354.2 today (an extra €115.5).

This rate will then be revised again in August 2023 and it should stabilize or even increase to 6.3% taking into account the latest estimates from INSEE, which envisages an inflation peak of 7% in January-February 2023, before returning to around 5.5% in June.

Income limits

The LEP is thus reserved for households that do not exceed certain 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 Banque de France estimates, only 37% of the 18.6 million eligible French people held a LEP in mid-2022 despite a record number of openings (824,000) in 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.

Up to two LEPs 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. For a household with two LEPs filled to the ceiling, this could generate around €955 in annual interest provided it has savings of €15,400.

Resource ceilings not to be exceeded to open a LEP (reference tax income N-2 or N-1)
Source: Ministry of Economy and Finance
1 share (single)20.297 €
1.5 shares (single person with 1 child)25.717 €
2 shares (couple)31.137 €
2.5 shares (couple with 1 child)36.557 €
3 shares (couple with 2 children)€41,977
3.5 slices47.397 €
4 shares (couple with 3 children)€52,817
Per additional share+€5,420

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