Finance

Millions of savers receive confirmed bad news on their Popular Savings Account (LEP)

On July 5, 2024 , updated on July 5, 2024 — bad news, confirmation, popular savings book, savers, the p - 3 minutes to read

Millions of savers recently received a happy confirmation of their Popular Savings Booklet (LEP).

The rate of remuneration of the Livret d’Épargne Populaire (LEP) is expected to fall on August 1, 2024, affecting the 11.5 million holders of this investment intended for modest savers. This rate, currently set at 5%, is revised every six months based on inflation. With average inflation of 2.5% for the first half of 2024, the rate should be around 3.7%. Despite this, it will not fall below 3.5%, being based on that of Livret A increased by 0.5 points. An intermediate rate of 3.75% to 4% could be considered. Savers must therefore remain vigilant and adjust their savings strategies accordingly.

The LEP remuneration rate down on August 1, 2024

11.5 million of holders of a Popular Savings Booklet (LEP) will have to prepare for a new revision of the rate of return on their savings. Following the reduction in inflation, this rate, which is currently set at 5% since February 1, 2024, should suffer a significant drop from August 1, 2024.

Reminder of the half-yearly rate review

The interest rate of the LEP, a tax-free investment intended for modest savers subject to resource conditions, is revised twice a year: in January and July. According to the decree of January 27, 2021, this rate depends on the higher of that of the booklet A increased by 0.5 points and the rate of inflation over the past six months. The next revision, announced by the Banque de France in mid-July 2024, will concern the period from January to June 2024.

Analysis of inflation for the first half of 2024

Data published by the National Institute of Statistics and Economic Studies (INSEE) show an average inflation of 2.5% for the first six months of 2024. More precisely, consumer prices excluding tobacco increased by 2.3% in March, 3% in February and 2.2% in April. This level of inflation directly influences the revision of the LEP remuneration rate.

Impact on the LEP remuneration rate

Despite the reduction in inflation, the LEP remuneration rate will not suddenly increase from 5% to 2.5%. The LEP rate cannot be lower than that of the Livret A increased by half a point. As the Livret A rate is currently frozen at 3% until February 1, 2025, the LEP rate will not fall below 3.5%. According to calculations by the Banque de France, it is expected that the LEP rate will be around 3.7%.

Possible agreement on an intermediate rate

Faced with these imminent changes, an intermediate rate could be considered. According to Philippe Crevel, an economist, the government resulting from the early legislative elections could propose a rate of 3.75% or even 4%.

To summarize, savers must remain attentive to official announcements from the Banque de France and plan to adapt their savings strategies according to the new LEP rate.