Livret A, life insurance, current account… Why the French are recovering to save a lot

After an improbable peak of nearly 27% in the heart of the first Covid-19 lockdown, the savings rate has fallen significantly. Households are saving less, especially to cope with inflation. But this drop will be short-lived, according to INSEE, which expects a strong recovery in the savings rate. History of having an important mattress in case of a hard blow.

There is a desire to have preventive savings, analyzes Julien Pouget, head of the finance department at INSEE, when he presents his financial quarterly report on Thursday. An analysis based on past and expected trends in the household savings rate, in other words the proportion of income that the French put aside each month.

This savings rate had hovered around 14% or 15% since the 1990s… until the Covid-19 crisis. The first confinement caused a sharp increase to 26.8% in the 2nd quarter of 2020. A special case, but this savings rate remained very high, close to or even sometimes above 20% at the end of 2020 and in 2021. a more classic rate in Q2 2022, 15.5%.

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But INSEE calculates one savings rate 16.7% in Q3 2022 and expects a recovery in this savings rate by the end of 2022 17.2% in the last quarter of 2022. Be careful, this does not mean that the French manage to invest more than 17% of their salary or other resources every month! Already this is an average that hides very different situations… But above all, this savings rate measures the share of income (1) which are not used for consumption expenses.

The financial savings rate more precisely measures the money allocated to savings products and was only 7.7% in 2021, but this indicator is updated less regularly by INSEE. The total savings rate thus does not distinguish between a mortgage repayment, an investment in life insurance and a financial cushion kept in one’s current account…

Savings: what part of their income do the French invest each month?

How can this expected recovery in the savings rate be explained? We have reached a historic low for household confidenceremembers Julien Pouget, during a press conference. This will likely weigh on consumption… and therefore have a rather larger saving. Indeed, he emphasizes that labor income continues to rise, sometimes at rates higher than inflation. Despite appearances, despite the price increases, many households have a financial surplus at the end of the month. This trend, accompanied by declining confidence, encourages austerity. Just to prevent the disappointing tomorrow.

Savings: this record jackpot that the French let sleep in their current accounts

(1) Gross disposable income.

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