Who is missing from the popular savings account (LEP)? If the Banque de France recently welcomed “historical breakthrough» of this regulated booklet, which reached 10 million holders last August, now benefits from the best guaranteed investment on the market just a little more than every other eligible person. In order to reach the goal of 12.5 million holders by the summer of 2024, it is necessary to acquire, above all, the youngest ones.
>> Our service – Save money by testing our passbook comparator
As the Banque de France recalled in a press conference on October 31, adults under 25 represent less than 2.5% of LEP holders (and only 1% of LEP holders). French population. However, the vast majority of these nearly 7 million people are eligible to open an LEP.
The 18-25 age group is the poorest part of the adult population
According to INSEE data, it is the age group of 18 to 24 years that has the lowest average standard of living among adults (21,630 euros). It is also the population most affected by poverty, with around a quarter of 18-24 year olds receiving less than €1,102 net per month (60% of median income). In particular, INSEE tells us that the average annual income of this age group is 18,890 euros, which means that at least half of those who make it up are actually entitled to LEP, which this year is reserved for people with an income of less than 21,393 euros. per year (which amounts to more or less than 1,700 euros net per month).
To summarize, there are currently only 250,000 young people aged 18 to 25 who are LEP holders, with at least 3.5 million of them eligible based on their income. Of course, a low level of income often goes hand in hand with a low level of savings. “What’s the point of opening a LEP if I have nothing to put on it?” could oppose the youngest of us. You can start by transferring the savings you have in your Livret A account.
250,000 LEP versus 5 million Livret A
Many 18-25 year olds actually have one, even though they’d be very interested in having a LEP instead. According to the latest report on regulated savings published annually by the Banque de France, this age group held 9% of Livret A accounts at the end of 2022, while as a reminder they represent only 2.5% of LEP holders. Out of a total of 55 million open Livret A accounts, this means that 4.9 million people aged 18-25 have a Livret A account in their name. And they are not empty! With 5% of the total outstanding funds, we can estimate that adults under the age of 25 have an average of €7,300 saved in their Livret A.
The best investment if you have 10,000 euros saved, depending on your profile
This difference in the holding of the two booklets is mainly explained by the fact that Booklet A can be opened from birth, unlike the LEP, which can only be opened after reaching the age of majority. Therefore, when they turn 18, savers do not always think of exchanging the Livret A opened by their parents or grandparents for a LEP, although they have every right to do so if their income allows, regardless of their status (students, apprentices, employees, interns, etc.).
Livret A, which nevertheless brings them half…
And besides the fact that they have the right to do it, they are especially interested in it at the moment. The two regulated savings accounts have the same benefits (guaranteed and always available savings, freedom of payments and withdrawals, tax-free interest, etc.), but LEP is twice as profitable as Livret A. Currently, the latter shows an interest rate of 3%, while LEP it is 6%. Consider the savings held by 18-25 year olds on average in Livret A: €7,300. Between August 1, 2023 (the date of the last revision of the LEP rate) and December 31, this amount placed in Livret A generated an interest of €91.25. At LEP it would be double: 182.50 euros. No appeal.
LEP: can you open this brochure with a payment of 6%, the ceiling of which will increase to 10,000 euros?
What’s more, even if the LEP rate drops on February 1st, don’t panic, it will always be higher than your Livret A. In fact, the decree of January 27, 2021, which sets the remuneration rule for LEPs, emphasizes that they must always have at least o 0.5 point higher rate than Livret A. As long as you are entitled to LEP, you will never lose.
Therefore, even with small savings available, it is always interesting to open a LEP if you qualify for it, and even more so if you have savings for Livret A, which earns you half. To take advantage of this regulated booklet, simply contact your bank, which, as recently reminded by the Banque de France, must be responsible for verifying your eligibility with the tax authorities. So you don’t even have to submit a tax return to him. No more excuses!
Subscribe to our latest news
Key articles accompany you every week personal finance.