Weighted down by taxes, collection collapses

Collection of Livret A in October 2024: an expected drop

In October 2024, Livret A recorded an outflow of 1.94 billion euroswhile the LDDS contracted by 640 million euros. Or a withdrawal of 2.58 billion euros. The total outstanding balance of these two savings accounts now amounts to 581.8 billion eurosa return to levels comparable to those before the COVID-19 pandemic.

These figures are part of a classic seasonal trend. The month of October often coincides with major tax expenditures, such as property tax or income tax adjustments.

The marked differences between tax-exempt passbooks in France

If the withdrawal of Livrets A and LDDS is significant, it remains lower than that observed in October 2023. At the time, a massive transfer effect towards the Livret d'Épargne Populaire (LEP) had amplified outflows. In fact, the LEP then benefited from remuneration of 6 %twice the rate of other regulated savings accounts, as well as an increase in its ceiling to 10,000 euros.

This year, the LEP maintains positive momentum with a net collection of 210 million euros in October 2024. Its rate, currently set at 4 %continues to appeal to low-income households, particularly tenants, who are often less concerned by heavy tax burdens.

Comparison of changes in outstanding amounts in October 2024:

End of a cycle: drop in rates planned for Livret A, LDDS and LEP

The Livret A and LDDS rates, stabilized at 3% since February 2023, should fall to 2.5% in February 2025according to Eric Lombard, general director of Caisse des Dépôts. This readjustment, in accordance with the calculation formula, reflects an economic environment marked by inflation falling below 2%. At the same time, long-term savings products, such as life insurance and Retirement Savings Plans (PER), are regaining attractiveness thanks to tax advantages.

2024: an overall positive year for savings

Despite this one-off collection, the year 2024 remains comparable to 2019, before the health crisis. Dince January, the cumulative collection of Livret A and LDDS accounts has been around 17 billion euros, and should reach 20 billion euros by the end of the year. These figures demonstrate prudent but active management of savings by the French.

The choice between liquid savings and long-term investments now seems to guide financial behavior, particularly with the strong comeback of euro funds in life insurance, which recorded positive inflows. 900 million euros in September 2024.

As the rates of regulated savings accounts prepare to decrease, the French will be faced with new trade-offs: favor available but less profitable savings, or move towards riskier and longer-term investments. With a LEP rate still competitive and options such as PER or life insurance, the future of savings remains an open question.