Minor children hold more than 40 billion euros of savings in their name, according to the office of Minister of the Economy Bruno Le Maire. These sums are mainly placed in the Livret A, for a little more than 26 billion euros at the start of 2023, according to the Banque de France. An economic heresy, they say at Bercy! This type of long-term savings could more usefully be invested in the economy rather than in the Livret A, it would be more profitable for everyone.
However, it is difficult to distract the French from their favorite passbook, simple to understand, liquid, completely tax-free (no income tax or social security contributions) and exceptionally… attractive, with remuneration set at 3% net until February 1st. 2025! But it won’t last. The rate being partly linked to inflation, if this continues to fall to return to its target of 2%, then the yield on the Livret A will also seriously decline. However, investing in long-term savings at a rate lower than 3% is not the most optimal!
And this is where Bercy comes in. Building on the success of the retirement savings plan (PER) created by the Pacte law of 2019, the ministry wanted to build a savings product specially designed for young people, invested in ecologically virtuous companies in order to support the energy transition. The future climate savings plan (PEAC) was born in the Green Industry law of October 2023 and it was baptized in December with the finance law for 2024, which gave it an unparalleled tax regime.
It can be subscribed to by parents from birth, savings will be blocked until the child turns 18 and the plan will be automatically closed at age 30. In the meantime, the sums will be placed either in a securities account in a bank, or in a capitalization contract (same product as life insurance, but without the preferential tax regime in the event of death), with an insurer . Financial management will be profiled and entrusted to specialists, with prudent, balanced or dynamic profiles.
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You will only have to choose the one that suits you best, you can also waive it if you prefer to take care of the financial management of the contract yourself. “This type of management should produce a higher return than that of Livret A, but there will be no State guarantee. In certain types of profiles, insurers could offer one, but ultimately“, we say in the office of the Minister of the Economy. They could, for example, offer you a so-called “floor” guarantee, which allows you to regain at least your investment when the child turns 18, or even more, the sums invested plus a little something. The financial supports in which your payments will be placed must also be virtuous in terms of ecology or the environment.
Your payments will however be capped at 22,950 euros, as with the Livret A. But you will benefit from super attractive taxation: no income tax or social security contributions, neither on your payments, nor on your earnings. Clearly, the exemption is total, as for the Livret A and the Sustainable Development Booklet (LDDS), the only two other products to benefit from it. Details are still awaited by decree on a certain number of points, but the PEAC will be marketed no later than July 1, 2024, according to the Green Industry law. There’s just !
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Since January 1, minors no longer have access to the retirement savings plan
It was a trick that allowed parents to save even more tax. By opening a retirement savings plan (PER) for their minor child, they could make payments into it and deduct them from their taxable income up to 4,113 euros in 2023. This was only of interest if they had themselves reached their own retirement deductibility ceiling, already high (10% of income every year). Only a few wealthy households have taken the plunge: “no more than 2,000», according to the office of the Minister of the Economy. But, with the advent of the future climate savings plan (PEAC), aimed precisely at young people, Bercy decided to eliminate this tax loophole. It is included in the finance law for 2024: from January 1, it is prohibited to take out a PER for a minor or to make new payments. Existing PERs are therefore frozen, up to the majority of the children entitled to them. However, it is possible to withdraw the money invested there (with taxation of the capital and the gains made) and, why not, place it in a PEAC.
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2024-01-28 04:48:16
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