“The Impact of Inflation on Financial Devices in France: Can We Expect Changes?”

The financial life of the French is filled with advantageous devices which are limited by legal ceilings. Livret A, life insurance, tax loopholes, deposit guarantees, inheritance… so many sectors where limits were set, sometimes more than 10 years ago, to avoid too high a cost for the State.

But with inflation of 5.2% in 2022, and expected at 5.4% for the year 2023, the value in terms of purchasing power of these advantages is melting like snow in the sun. Thus, according to an exclusive survey by YouGov for MoneyVox, 67% of French people are for the increase in the ceiling of the Livret A and 57% for increasing that of tax-free inheritances!

Livret A: a rate that no longer covers rising inflation

The Livret A ceiling was greatly increased on 1^is January 2013, going from 15,000 to 22,950 euros. But nothing since, despite a rate that no longer covers rising inflation.

« A revaluation is however unthinkable, for 3 reasons : first, because the current Livret A ceiling is largely unused (average outstanding amount is €5,800) ; and because when it is, it is by the wealthiest French people. An increase would therefore, in fact, be a gift to the richest; finally, because the Livret A can be combined, since 2009, with the LDDS – €12,000 more – in all establishments », Analyzes Maxime Chipoy, President of MoneyVox.

Regulated savings: a LEP at 10,000 euros ?

On the other hand, a revaluation of the ceiling would be totally appropriate for the Livret d’Epargne Populaire (LEP): fixed at €7,700 in 2002, it has since lost more than a third of its value in purchasing power. If it had been revalued 20 years ago, it should currently be at €10,416!

« On this product, an upgrade would make sense : LEP benefits only the most modest French people. However, they are the ones who pay, in proportion, the heaviest price in the face of the current high inflation. An increase in the ceiling to €10,000 would be totally appropriate says Maxime Chipoy, from MoneyVox. An increase in the ceiling supported by 68% of French people.

Life insurance, tax loopholes: old ceilings that are unlikely to be revalued…

The tax thresholds for life insurance have not changed since… the last century! The earnings ceiling (€4,600) that can be withdrawn each year from life insurance without paying tax dates from 1997, as for the reduction of €152,500 on inheritance tax, it dates from… 1991! Revalued, these amounts would be nearly €7,000, and €245,000!

Same fight on tax loopholes: the maximum amounts that can be deducted from income tax were limited, in 2013, to €10,000. An envelope which should today approach 11,500 €. ” Here too, there is no effort to achieve on the part of the State, as these niches only concern the richest in priority. For example, according to the Court of Auditors, the wealthiest 10% benefit from 43.5% of the personal services niche. Similarly, there are many exceptions (donations to charities, Pinel, Girardin, Sofica, etc.) that allow you to greatly exceed €10,000. “, indicates Maxime Chipoy, of MoneyVox.

…except perhaps for estates

If there is a tax loophole that risks being revalued, conversely, it is that of the reduction in inheritance tax. Dropped from €159,325 to €100,000 following the election of François Hollande, it has not budged since then, losing 14% of its value in the meantime. ” This subject was very widely discussed during the last presidential election, with each candidate going out of his way. Emmanuel Macron, for his part, promised to increase the ceiling to €150,000 and to facilitate indirect transmissions. A consensus proposal : 14% of French people want to increase the ceiling to 150,000 euros, 20% to 200,000 euros and 23% beyond 200,000 euros “, specifies Maxime Chipoy, of MoneyVox.

Guarantee fund: upgrading to reassure ?

Last notable element, among others: the guarantee funds on bank and financial savings and life insurance of the French. In this period of doubts, these ceilings could be raised.

« Raised in 2010 to €100,000 and no longer affected since, the individual limit of the bank deposit guarantee fund should now be almost €120,000. Worse, that of life insurance was set at €70,000 in 1999. Today, it should be €100,000 ! A revaluation which would also simplify the understanding of the system by French savers. Remember that in the United States, the amount of cover is 250,000 dollars », Analyzes Maxime Chipoy, of MoneyVox. An increase in ceilings supported according to our survey by 49% for bank savings and 56% for life insurance.

Source : MoneyVox