Booklet A: Five numbers to understand the French savings juggernaut
The measure, announced in mid-July, came into force on Monday 1 August: the remuneration of the Livret A increases from 1% to 2%, a level not seen in 10 years. This doubling follows that seen earlier in the year, a direct result of runaway inflation in recent months.
That rise is set to continue next year, Banque de France governor François Villeroy de Galhau has already warned, as inflation continues to rise and interest rates rise. Which gives an even more central place to France’s most famous savings products.
55 million issues
That’s how many French people have a livret A. A retention rate of almost 81%, which confirms the predominant place that this product – with a ceiling of 22,950 euros for individuals – occupies among the savings possibilities of the French.
This number is also much higher than the other investment solutions that the French traditionally turn to. According to Cercle de l’Epargne, life insurance, the second most common investment in France, was held by only 40.5% of households in 2021.
The brochure on Sustainable and Solidarity Development (LDDS) is lagging behind. However, this “little brother” of Booklet A, which is also regulated and benefits from the same tariff, is less popular: only 35.9% of households owned one in 2021.
324 billion euros
This is the outstanding amount of the livret A at the end of 2021. An amount that increases to 343.1 billion euros if legal entities are included, and which has increased by another 16.5 billion euros since the beginning of 2022.
Since 2008, the volume of savings account A has more than doubled, so that it now accounts for almost 40% of the total circulation of regulated savings products.
In 2021, this amount was ahead of that of the home savings plan (PEL), estimated at €291.3 billion, and that of the LDDS, which totals €125.9 billion, the Bank of France recently pointed out in its annual regulated savings from report. These three products accounted for 89% of outstanding regulated savings last year.
24 billion euros
It is the net balance of the livret A in 2021, which therefore resulted in the total outstanding being inflated. In detail, the French have deposited 225 billion euros in their savings accounts and withdrawn 201 billion euros. These movements, in both withdrawals and deposits, were larger than in 2020 and well above average flows observed since 2009.
For François Villeroy de Galhau, who spoke on the subject two weeks ago during the annual presentation of the report on regulated savings, these movements would be linked to “post-Covid disruptions” as well as to the economic recovery that have given rise to more decisions on the part of the Households.
This is the average outstanding amount of a Sparbuch A at the end of 2021, an increase of 300 euros within one year. A level that is well below the upper limit of EUR 22,950, but hides a high concentration: just under 14% of savings accounts have an open amount of more than EUR 19,125. And they alone represent nearly 55% of the total outstanding savings account balance. Similarly, during the time of the health crisis, the “over-savings movement” logically focused on the wealthiest households.
10.4 billion euros in loans
This is the amount in euros of loans signed by the Caisse des dépôts et consignations (CDC) for the construction of social housing at the end of 2021. A figure that has increased by 6% in a year and has allowed the construction of 85,300 new social housing and up 81,600 to renovate late last year.
The issue is closely linked to Livret A reimbursement and collection, as the CDC’s savings fund (which centralizes 60% of regulated savings, or nearly €300 billion) is used to refinance these loans.
Nevertheless, the increase in income from issue A worries social landlords. In mid-July, the social housing association warned of the increasing debt burden. “A year ago, the Livret A rate was 0.5%. This quadrupling of the rate increases the sector’s debt burden by more than €2.1 billion in a full year, or 10% of total rents.”