Wednesday, May 18

finance. The French still save more, but have filled out their Livret A less than in 2020

A good year for savings. With the continuation of the Covid-19 pandemic, the French continued to save heavily in 2021, especially at the start of the year. But the Livret A account was used less than in 2020, with however a deposit of 15.17 billion euros more than withdrawals over the year, according to figures released Friday by the Caisse des dépôts. As for the Sustainable and Solidarity Development Booklet (LDDS), the increase in deposits reached 4.04 billion euros.

In total, the two passbooks therefore earned 19.2 billion euros in 2021, compared to more than 35 billion in 2020. But this level remains historically high: in 2019, the excess deposits had reached 16.55 billion. For the Livret A account alone, the collection had been 26 billion in 2020, a peak not reached since 2012, while it is now almost back to its 2019 level (12.64 billion).

Cumulatively, the Livret A and the LDDS accounted for total outstandings of 469.8 billion euros at the end of December, an increase of 4.8% over one year.

Fluctuations linked to the pandemic and household confidence

At the start of the pandemic, these two booklets, which nevertheless guarantee a historically low interest rate of 0.5% per year, were a breathtaking success. But since this summer, we have seen a gradual return to normal, with even at the end of the year a trend towards outflows, ie withdrawals exceeding deposits.

In October, the Livret A account even experienced a “deficit” of deposits compared to withdrawals, unprecedented since the end of 2014, with a net collection of -2.83 billion euros. And in December for example (in green on the graph below), the French withdrew 1.7 billion euros more from their livret A than deposits, and this while the last month of the year is traditionally a month of collection (Christmas expenses are often spread over the previous months and the French tend to reconstitute their savings in December, especially those receiving a 13th month or end-of-year bonuses).

For Philippe Crevel, director of the Cercle de l’épargne, this result for December can be explained by two factors: on the one hand “the French had fun” for the end-of-year celebrations, after almost two marked years by the pandemic, and on the other hand the rise in prices, in particular of energy, has limited savings capacities.

According to data provided by the Banque de France in December, the French have actually oversaved due to the pandemic. The surplus, which had reached 114 billion euros in 2020, is now 187 billion. In total, household savings amounted to 293 billion euros at the end of 2021, split 40% into life insurance, 36% into current accounts and passbooks, 14% into transferable securities (equities… ) and 10% on employee savings. But this oversaving has been decreasing since the third quarter of 2021 “since it has only increased by 6 billion euros”, specifies the Banque de France, against 22 billion over the first three months of the year.

Due to the sharp rise in inflation in 2021 (1.6% on average over the year), the Banque de France and the government announced last week an increase in the Livret A and LDDS rates by 0, 5% to 1% from February 1. A first for ten years.

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