The remuneration they receive thanks to their Livret A will be impacted by this change.
Millions of savers will become disillusioned. While the Livret A is the most popular savings product in France, the 58 million French people who own one will soon receive some less than encouraging news. The disappointment will be all the greater as Livret A is known to offer many advantages.
In fact, the interest generated by the sums deposited in a Livret A benefits from a tax exemption. In addition, the booklet has recently offered an attractive interest rate. Faced with inflation, the government has made several increases in the Livret A interest rate. Thus, the rate has gradually increased from 0.5% in February 2022 to 3% in February 2023. It is important to note that the Livret A rate is normally reassessed every six months, in February and August of each year. However, the government has chosen to freeze the Livret A rate at 3% until February 2025.
With the recent slowdown in inflation, the Livret A has therefore become particularly attractive. While this investment is generally considered to be poorly profitable, it currently finds itself in an unprecedented situation where its rate exceeds that of inflation. However, this situation may not last. The slowdown in inflation is not necessarily good news for savers holding a Livret A.
In question, the calculation of the Livret A interest rate is based on a mathematical formula taking into account two main variables: the inflation rate excluding tobacco and also the €ster interbank rate. However, these two indicators are evolving in such a way as to potentially reduce the Livret A rate in the future. According to INSEE forecasts, inflation excluding tobacco should be around 1.8% in 2024. As for the €ster rate, its half-yearly average should fall to 3.60% at the end of the year.
Concretely, these developments suggest a possible reduction in the Livret A rate from February 2025. By applying the calculation formula, the new Livret A rate could be established at around 2.70%. Clearly, the 58 million savers could see their income generated by their Livret A decrease.
While the average outstanding balance in this booklet is 6,351 euros, a saver having invested this sum will earn 176.34 euros in 2025 compared to 190.53 euros this year. For a livret A having reached the ceiling, set at 22,950 euros, the gain will be 619.65 euros net in 2025, compared to 688.5 euros in 2024.
However, it should be noted that these projections remain subject to future political and economic decisions. The future government, in consultation with the governor of the Bank of France, could choose to strictly apply the calculated technical rate, or on the contrary deviate from the rule to limit or accentuate this reduction.
