Faced with inflation, the French want to save more but are unable to do so

(BFM Bourse) – In the face of the shock of inflation, the desire of households to save remains very high, but they admit that they have difficulty feeding their woolen socks. Their choice remains blurred due to inflation and changes in the remuneration of regulated savings products (Livret A, LEP, etc.), according to the BPCE Observatory.

The French are no exception to their reputation as “ants”, and the recent rise in prices has become one of the main reasons for austerity, says the latest study by the BPCE Observatory. The desire of French households to set aside money remains at its highest, especially since it is also motivated by long-term concerns (retirement, rising public debt, etc.). But at the same time, the French have not been so pessimistic about their ability to save since the beginning of 2019, a pessimism that has particularly affected the most moderate households with inflation, the study added.

A savings rate is expected to be more than 16% in 2022

For BPCE economists, the French savings rate will remain close to 16.2% in 2022, then should decrease slightly to 15.8% in 2023, after 18.7% in 2021 and 21% in 2020. This rate savings will remain higher than the pre-Covid average (between 14 and 15%). “It is true that the recent increase in the savings rate is mainly due to wealthy households, whose propensity to consume is lower than average”, says the study, adding that “the lack of return, especially if Higher inflation erodes the real value of their financial assets, prompting them to hold on to more abundant savings as these rich people anticipate future tax increases, in the face of public outcry finance”.

According to the same barometer, new financial investments will gradually continue to decrease, from 111 billion euros in 2021 to 89.6 billion euros in 2022. In 2023, it should represent the total -the amount of 66,7 billion euros. This reduction comes after an absolute record of 149.3 billion euros in 2020. According to the Observatoire BPCE, this reduction is explained, in part, by the reduction and then the weakness of household purchasing power, and on the other hand, by the expected slowdown in the distribution of mortgage loans, highlighted in 2023. at a slower rate, in 2022,” added the study.

Collection favored by booklets, and especially with the increase in the LEP rate

Regarding the arbitrages of financial investments, the standards of French households remain, according to the BPCE, “stained by the return of inflation and the still limited increase in regulated rates that is still far, at 1%, from psychological threshold of likely. to trigger significant arbitrage and close to 2.5%”. But the regulated passbooks should find new impetus with the increase in the rate of Livret A (2%) and the Livret d’épargne populaire (LEP) to 4.6% on 1 August. Regulated booklets will also continue to benefit from the outflow movement of PEL, the latest generation offering a net tax rate (0.7%) lower than Livret A.

For its part, life insurance primarily benefited from the momentum of unit-linked products, with momentum also fueled by retirement savings plans (PER). “In a context of strong appetite to prepare for retirement, which is now reinforced by uncertainties related to the government’s pension reform project, net inflows, excluding transfers of PERs of insurers, representing the equivalent of 28% of the flows. net of life insurance for a year”, BPCE explained. In addition, unit-linked products also benefit, according to BPCE, from a limited but gradual reduction in risk aversion in an economic climate that many consider unfavorable for the stock market, which led to the transfer of securities to unit-linked life insurance. for 18 months.

For BPCE economists, the trade-offs between financial products, which are still guided by a wait-and-see attitude, the search for security and the availability of harmful risk, therefore must be will be disrupted by the scale of sudden changes in the regulated. rates in 2022 and 2023. They also mentioned “the effect of the surge, seen by households, on inflation, even the Livret A and especially the LEP”. the bank – expected to 7.2 billion euros in 2022 – because its return (4.6%) is now more than the psychological threshold of remuneration of 2.5%.

Sabrina Sadgui – ©2022 BFM Bourse

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