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Great news awaits holders of the popular savings brochure (LEP). From December 31, 2024, more than 2.5 million French people will benefit from annual interest payments. Find out the details and the impact of this measure on their purchasing power.
2.5 million French people will receive a nice sum in a few days
At midnight on 31 December 2024, Popular Savings Booklets (LEP) holders will see their accounts credited with interest accrued over the past year. Reserved for low-income households, this booklet offers a much higher reward than traditional savings products.
In 2024, the LEP rate has oscillated between 6% at the start of the year and 4% since August, allowing for attractive gains despite an economic context marked by inflationary pressures. For example, a saver who deposited the allowed limit of €7,700 was able to accumulate almost €472 in net tax-free interest.
The aim of this initiative is to offset the inflation that continues to weigh on household budgets. It also reflects the government’s desire to preserve the purchasing power of citizens on modest incomes in the face of increasing spending constraints.
LEP, ideal savings for low-income households
Designed to protect the most vulnerable savers, the LEP stands out for its numerous advantages:
- Favorable rate: Always at least 0.5 points higher than Livret A.
- Availability: Low initial deposit and easy opening conditions.
- Financial security: Interest is guaranteed and tax-free.
In comparison, Livret A currently caps at 3% compared to LEP’s 4%, making it a more attractive option for maximizing savings returns.
However, income conditions must be met in order to use it. In 2024, only households whose reference tax income is below a certain threshold will be eligible.
Economic impact and outlook for 2025
As the property market struggles to recover and the French economy faces structural problems, the LEP interest payment offers a breath of fresh air to millions of households. This system indirectly helps to kick-start consumption at the beginning of the year, which is a key driver of economic growth.
The outlook for 2025 presents a mixed picture. The gradual suppression of inflation should lead to a decrease in the LEP rate. The governor of the Banque de France plans to cut to around 3% next February. This rate will still retain its advantage over Livret A and guarantee a more attractive return for French savers.
The LEP remains a mainstay of savings in France, especially in times of economic turbulence. The payment of interest at the end of 2024 is a reminder of the importance of this product in supporting the purchasing power of low-income households. LEP holders can approach 2025 with confidence while remaining vigilant in the face of future economic developments.
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DISCLAIMER OF LIABILITY
The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.