Like the Livret A, whose rate will double from next month, the interest on the Livret d'Epargne Populaire (LEP) will rise from 2.3% to 4.6% from August 1. The Ministry of the Economy and Finance is preparing to launch a communication campaign to promote this regulated savings product and encourage more French people to take advantage of it.
Livret d'épargne populaire (popular savings passbook): interest doubled
Unlike the Livret A, which is indexed to both short-term interbank rates and the average half-yearly inflation rate, the Livret d'épargne populaire (LEP) is only indexed to the average inflation rate over the last 6 months.
In line with Banque de France recommendations, the interest rate on the LEP will double from 2.3% to 4.6% from August 1. At the same time, the Livret A rate will rise from 1% to 2% next month.
According to Cercle de l'Épargne director Philippe Crevel, the Livret d'Epargne Populaire is the investment that "best protects against inflation". Yet it remains little-known: at the end of 2021, only 37% of eligible French people had one, i.e. fewer than 7 million people, compared with nearly 56 million Livrets A. The Banque de France estimates that 18.6 million savers are eligible for the LEP.
A new communication campaign
28% of the French population meets the criteria required to open a Livret d'Epargne Populaire savings account. The LEP is reserved for people on modest incomes: the 2021 income ceiling is set at 20,297 euros for a single person, and 31,137 euros for a married or civil union couple without children.
This regulated savings account is reserved for adults, and the number of LEPs is limited to 2 per tax household. The LEP ceiling is lower than that of the Livret A: you can only deposit up to 7,700 euros on a LEP, compared with 22,950 euros on a Livret A, but anyone eligible for a LEP can also have a Livret A.
According to French Finance Minister Bruno Le Maire, interviewed by Le Parisien, the Livret d'Epargne Populaire savings account remains insufficiently well known. In February, Bercy launched an initial communication campaign that led to the opening of 400,000 LEPs, a figure deemed too low.
According to Bruno Le Maire, the LEP is an additional tool to "support modest households in the face of inflation and declining purchasing power".
The rate on the Livret d'Epargne Populaire passbook savings account will rise to 4.6%. This is the most effective investment for protecting savings against inflation.
- Bruno Le Maire (@BrunoLeMaire) July 15, 2022
Perhaps you're entitled to it? 15 million French people are eligible, but only 7.3 million have opened one.
To encourage more eligible French people to open a LEP, a new communication campaign is to be launched with the Direction Générale des Finances Publiques. All savers concerned should receive an informative e-mail.
Since a decree published in March 2021, it is no longer necessary to present a tax notice to your bank to open a LEP. This simplification played a significant role in the opening of 824,000 LEPs between January and May last year.