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Life insurance, Livret A … The huge jackpot that French households save


Life insurance remains the investment that provides the most savings in France, with outstandings estimated at 1.827 billion euros at the end of October (illustration). (Pixabay/Nattanan23)

In France, household financial assets amounted to 5.726 billion euros at the end of June. To invest their money, the French still prefer life insurance and regulated savings such as Livret A. A huge jackpot also sleeps in demand accounts.

Life insurance is still growing. The financial wealth of the French remains largely invested in this type of investment, far ahead of regulated savings of the Livret A type. Latest figures available from Banque de France provided by

AFP

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This sum has increased by 54% compared to the end of 2010, but less than at the end of December 2021, when it peaked just above 6,000 billion euros, according to the central bank, which produces a score every quarter.

18 million people have life insurance

Life insurance remains the investment that provides the most savings in France. According to data from the professional association France Assureurs published on Thursday, December 1, the outstanding amounted to 1.827 billion euros at the end of October. Around 18 million people have life insurance, representing a capital of around 100,000 euros per person. subscriber, often invested in several contracts. The amounts are divided into two main categories: euro funds, whose capital is guaranteed and the return determined each year by the insurance company, and unit-linked (UC), riskier investments which do not provide any guarantee of capital to the insured, but which can, in good years, give more.

However, life insurance is shaking on its pedestal this year, gripped by competition from regulated savings and poor market performance. According to the Banque de France, its outstanding market capitalization fell by 220 billion euros in the first half of 2022, mainly in euro funds.

5,800 euros on booklet A

Livret A, often presented as the French’s preferred investment, as 55 million have one, is far behind. With 368.5 billion euros at the end of October according to the latest score from the Caisse des Dépôts, its outstanding amount is actually five times lower than that of life insurance, specifies

AFP

. in the question? A ceiling set at 22,950 euros, its opponents respond. Livret A savings accounts are only filled with an average of 5,800 euros at the end of 2021, i.e. only a quarter of their capacity.

This product, which is guaranteed, exempt from tax and which allows to recover one’s funds very easily, is cornered by the banks as the remuneration they have to earn – 2% since August 1st, more to come next February – weighing on their margins. This return is also better than many euro life insurance funds. It should be noted that there are other regulated savings products, such as the housing savings plan (PEL), the People’s savings booklet or the booklet on sustainable and solidary development (LDDS).

A reserve that sleeps in current accounts

Although there is a wide range of financial products apart from life insurance and regulated savings, some household money is invested or not invested. The reserve lying dormant in these current accounts is even greater than that deposited in Livret A accounts and LDDS combined: almost 700 billion euros at the end of June, according to the Banque de France. This money, with no or extremely poor interest, suffers even more than other investments from the impact of inflation, measured at 6.2% over a year in November, according to a first estimate from INSEE.

The box of cash under the mattress has finally not disappeared. Almost eight out of ten euro notes in circulation are “hoarded”, that is, kept at home, says the Banque de France.

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