Has the composition of household wealth changed with the health crisis? Not spectacularly given the latest “Heritage” survey unveiled by INSEE on Tuesday 3 May. Thus, at the start of 2021, 61.2% of French households owned real estate, compared to 62% in 2018 and 61.7% in 2010. And unsurprisingly, 57.5% of French people owned their main residence, compared to 57 .6% in 2010. Nothing surprising, therefore, France being – it is well known – a country of owners.
The Livret A: nearly three out of four French people
Same observation for the financial heritage of the French, which has not experienced any significant upheaval. The Livret A thus remains their preferred investment, since it is held by 73.5% of households in 2021, compared to 68.5% in 2010. And this, despite an interest rate that fell to its historic low of 0.50% on February 1, 2020. But the over-savings caused by the Covid-19 crisis probably offset the drop in the remuneration of the Livret A, indicates INSEE: “It is possible that the additional savings in 2020 supported the stability of the rate holding these passbooks, despite interest rates remaining very low over the period.”
A hypothesis that also holds for the Sustainable and Solidarity Development Booklet (LDDS), the former Codevi – whose remuneration is identical to that of the Booklet A – finding favor with 35.9% of households in 2021, against 35, 2% in 2018. It should be noted, however, that the relative disinterest of the French in this tax-exempt product is clearly apparent, since it was still held by 39.7% of households in 2010.
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Life insurance: more than two out of five French people
Proof that the return does not necessarily affect the popularity of a savings product, life insurance, and its remuneration on the euro fund (the guaranteed capital support) in constant decline (1.30% gross in 2021) , continues to reach more savers each year. Its ownership rate, from 35% in 2010, thus rose to 37.4% in 2015, 39.2% in 2018 to reach a peak of 40.5% in 2021.
A development that INSEE and France Assureurs (formerly the French Insurance Federation) attribute to the growing appeal of multi-support life insurance contracts that allow investment in risky assets (unit-linked) with an expectation of gain greater than that of the euro fund. “Since 2015, multi-support contracts have increased the ownership rate (…). The share of households that hold them goes from 13.3% to 16.8%, and these products represent 40.9% of (flows on) life insurance contracts in 2021 against 33.6% in 2015”, points out the institute. Conversely, mono-support contracts, which are confined to euro funds, are gradually being abandoned by savers, with a holding rate of 27.4% in 2021, compared to 28% in 2015.
“This trend towards more risk can be explained by the marked drop in guaranteed returns on euro funds; estimated on average between 1.0% and 1.3% in 2020, they have been in continuous decline since 2015 (2.5%)”, analyzes INSEE. This development is readily supported by insurers who, it should be remembered, have for several years imposed on subscribers a minimum percentage of units of account in order to be able to access the euro fund.
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The housing savings plan: less than one in four French people
While a housing savings plan (PEL) brought in 2.50% in 2010, this product only offers 1% interest in 2021. A statistic that has not, however, prevented the rate of ownership of the PEL to climb from 22.9% in 2010 to 27.5% in 2018. But since January 1, 2018, it’s a completely different story: the interest generated on this product being subject to the “flat tax” from the first year 30% (including 17.2% social security contributions), or the income tax scale (plus 17.2% social security contributions) optionally, the housing savings plan has lost its luster.
Thus, “since 2018, the opening of new contracts, which are now subject to taxation, has decreased. This is evidenced by the sharp decrease in the holding of housing savings by the youngest since 2018, down 9.6 points for households whose reference person is under 30 years old”, details INSEE. And overall, in 2021, only 24.7% of French people have a PEL.
It should be noted that the housing savings account, still held by 16.8% of households in 2010, is only held by 12.5% of French people in 2021. That is exactly one in eight households. Several explanations: the CEL rate, of only 0.25% between February 2020 and January 2022, and the taxation of interest, identical to that in force on the PEL since 2018.
The popular savings account: one in six French people
The LEP, for People’s Savings Account, is once again irrefutable proof that performance is not everything in the distribution of a savings product. From 23.4% in 2010, the percentage of households holding this investment reserved for taxpayers declaring modest incomes (20,297 euros maximum of 2020 reference tax income to open a LEP in 2022) fell to 16.4% in 2021. possible explanation: the decline in the return on this investment to 1% in 2020, against another 2.75% net in 2013. That is double, all the same, as the remuneration of the Livret A on the same date.
But this statistic could take off in the coming months. First of all because the LEP rate rose to 2.2% on February 1, 2022. But above all because it should explode on August 1 to reach at least 4%.
Stocks, bonds…: one in six French people
Among the major categories of investments studied by INSEE, securities are also only held by one in six French people. From 19.7% in 2010, the percentage of French people owning stocks, bonds, shares in open-ended investment companies (Sicav) or mutual funds (FCP) fell to 16.7% in 2021 A proportion, however, has started to rise again since 2018, when the detention rate was 16%, and which should be confirmed in the years to come, the opportunities created by the Covid-19 crisis having created vocations among many young people. savers wishing to take advantage of the profitability of the stock markets. And rightly so since the CAC 40 index delivered a performance of 28.85% in 2021.
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