As in 2023, the volume of French financial investments should remain at a relatively low level in 2024. This will not prevent them from moving their money according to opportunities. Here are the products which, in this context, could stand out.
Remember the old adage: credits make deposits. The sharp contraction in real estate credit, linked to a drop in transactions of around 20% over one year, was the most notable phenomenon of the year 2023, estimates Cyril Blesson, partner at the PAIR Conseil firm. He brought a very clear brake on the investment marketcontinues the macroeconomicist, because for each household that takes out a property loan to buy, there is another household that sells and has, at the end of the operation, money to invest.
Result: with the fall in transactions, French investments have plateaued around 110 billion euros in 2023compared to 160 billion a year earlier.
What will it be in 2024? Financial savings will remain hampered by the drop in creditsannounces Cyril Blesson, who still expects a slight recovery in the overall market.
This relative atony does not prevent the French from carrying out arbitrages on their savings stock. In short, to move their money from one medium to another, as opportunities arise. These arbitrations were massive in 2023, and this should be the case again this year. In this context, some investments will perform better than others. Here are the expected winners and losers of 2024.
The transfer of sight deposits to passbooks and term accounts will continue
After years of accumulation, at the height of the health crisis, dpts view – that is to say, essentially, the money held by households in their current accounts, for lack of being spent or invested – melted like snow in the sun in 2023, as had already been the case at the end 2022. Between January and October, the volume of money held by the French in their current accounts decreased by more than 34 billion euros, according to the Banque de France.
Despite the 3% of Livret A, the French still have more than 16,000 euros in their current account
Which support benefits from this windfall? Mainly, the interest-bearing bank deposits: regulated savings, ordinary savings accounts and term accounts, income thanks to the spectacular increase in their remuneration. We should find this situation of massive transfer in 2024, with a significant outflow of deposits seen in favor of term accounts and regulated savings, estimates Cyril Blesson.
Super boost rate booklet or term account: the match between Livret A competitors
Regulated savings, in particular, will continue to refuel. One product in particular: the popular savings account. Boosted by an unbeatable rate of 6% net, the LEP has passed the milestone of 10 million accounts in 2023. But there are still 8 million eligible French people who have not yet benefited from it. The product also benefited from the recent increase in its payment ceiling, from 7,700 to 10,000 euros on October 1. The LEP will continue to eat into the Livret A and LDDS collection, announces Cyril Blesson.
Not the Housing Savings Plan, however. The increase in its rate on January 1 (from 2% to 2.25% gross) should not be enough: the PEL should remain in pain, even if the bleeding has every chance of being a little less spectacular than in 2023 (-24 billion euros).
Life insurance, the return?
The momentum of interest-bearing bank deposits has claimed another victim:life insurance in euros. The former star investment had a dark year in 2023, with a drop in assets of more than 25 billion euros at the end of November. A figure just offset by unit-linked life insurance (UC), which recorded a positive net collection of 28.8 billion euros on the same date, according to France Assureurs.
Cyril Blesson believes that the year 2024 should be marked by a slight recovery, with a net collection, euros and UC supports combined, which could double, going from 5 billion to 10 billion euros. Nothing too spectacular, however. Life insurance, in fact, will probably continue to record a high level of services (i.e. withdrawals), again due to the contraction in real estate credit. Historically, as soon as we enter a phase of tightening of credit conditions, we see peaks in services, recalls Cyril Blesson. The reason is simple: to buy, households must draw more heavily on their savings.
Clouds could also appear in the sky life insurance in UC. Already in 2022, the difficulties of SCPIs, these real estate supports frequently contained in contracts, have sowed doubt among certain savers. In 2024, the units of accounts could also undergo a possible reversal of equity marketsagainst a backdrop of economic recession.
Life insurance: the best offers
The PER on the upward slope
One placement should, on the other hand, continue to stand out: the Retirement savings plan (PER) individual. The product launched in 2019 has continued to grow since then, going from 4 billion euros collected in 2020 to 12 billion expected in 2023. This trend was expected to continue. We do not see the PER slowing down, develops Cyril Blesson. The product is still on the rise, driven by pension reform and the tax advantages offered. It meets the desire of certain savers to cover themselves for their old age and, at the same time, save on taxes.
The 2024 comparison of the best PERs
Many uncertainties
So much for the prospects. The year 2024, however, remains uncertain in many aspects. The opportunities offered to savers will depend, in particular, on choice of monetary policy what the European Central Bank (ECB) will do in the coming months.
Since mid-2022, the institution has sharply raised its rates, to cool the economy and contain inflation. The objective seems on the verge of being achieved, with an expected price increase of around 2.5%, on average, in the first half of 2024, compared to more than 5.5% in mid-2023. The time therefore seems to have come to bring these rates down, which are beginning to weigh on economic activity. With, as a result, a decline in attractiveness of interest-bearing bank depositspassbooks and term accounts, which could change the situation.
Several factors, however, risk interfering in the ECB’s choices. The geopolitical context in particular, with risks of conflagration in the Middle East which could cause energy prices to rise again.
In this context, Cyril Blesson predicts a great caution on the part of monetary institutions. We think that they will wait until they are certain that they have exited this inflationary episode before lowering their rates, probably not before the end of the 2nd quarter.