The Livret d Épargne Populaire (LEP) savings account : A tool to promote savings of low income households? September 10th 2013 Bruxelles

Transcription

1 The Livret d Épargne Populaire (LEP) savings account : A tool to promote savings of low income households? September 10th 2013 Bruxelles

2 Sommaire Introduction 1- Households savings in France 2- A large range of tools to promote savings of low income households 3 Main features of the «livret d épargne populaire» savings account 4 Who are the holders of the «livret d épargne populaire» savings account? Banque de France Direction Générale des Statistiques DSMF & DESS Banque de d France - Direction Directorate Générale general of des statistics Statistiques - DSMF 2

3 Introduction 3

4 Introduction The main goals of the «livret d épargne populaire» savings account The «livret d épargne populaire» savings account goal is to encourage low income households to save a share of their income in order to constitute a precautionary saving buffer that could be used if a serious problem would occur. The premium of 50 base points above the interest rate of the «livret A» savings account (a regulated savings account) is designed to support the saving behaviour of low income households. 4

5 1- Households savings in France 5

6 Households savings in France Access to savings in France The bank account penetration rate of households in France is the highest of the European Union : 99 % in % of French households held a savings account in The French household saving rate reached 16% in March 2013 (6,8 % for the financial saving rate), which is one of the highest of the European Union. 6

7 2- A large range of products promoting savings of low income households 7

8 A large range of products promoting savings of low income households Other financial products available to promote savings of low income households Financial products set up by the French national authorities in order to fight against poverty and promote social inclusion: livret A savings account, livret de développement durable savings account, livret d épargne populaire savings account. 8

9 A large range of products promoting savings of low income households Other financial products available to promote savings of low income households Main Features : a deposit rate guaranteed by law superior to inflation ; State guarantee of the total deposits ; Tax exempted interests. Holding rate (% of French population) at the end of December 2012 livret A : 95 % Livret de développement durable : 37,1 % Livret d épargne populaire : 15,2 % 9

10 A large range of products promoting savings of low income households Other tools available to promote savings of low income households La Banque Postale, a French credit institution, has a public service mission including : Opportunity to open a livret A savings account for each person that may request it ; Opportunity to withdraw or deposit money (with a floor of 1,5 euro instead of 10 euros for others credit institutions) without charges and limitation. 10

11 A large range of products promoting savings of low income households The LEP savings account share in banking savings of households is low. Breakdown of banking savings of households (%) Holding rate (%) 11

12 3- Main features of the «livret d épargne populaire» savings account 12

13 Main features of the LEP savings account Definition of the LEP savings account Created in 1982 (act n ) by a law establishing a popular saving plan. Scope of the «Livret d épargne populaire» savings account (Article L of the monetary and financial code) : «The Livret d Épargne Populaire savings account is intended to assist the people with the lowest incomes to invest their savings under conditions that maintain their purchasing power.» 13

14 Main features of the LEP savings account Who can hold it? Taxpayers who are domiciled in France for tax purposes; who can show, each year, that the tax payable by them on their total income, before application of the tax credits and the standard deductions at source without full discharge, does not exceed 769 euros ; only one Livret d Épargne Populaire savings account may be opened by each taxpayer, and one for the taxpayer's spouse 14

15 Main features of the LEP saving accounts How holders can use it? Ceiling : euros Deposits : a minimum of 30 euros at the opening then deposits are free Free tax interests 15

16 Main features of the LEP savings account The deposit rate of the LEP savings account guarantees the households purchasing power... Deposit rate of the LEP savings account, inflation excluding tobacco (%) 16

17 Main features of the LEP savings account and a premium of 50 basis points compared with other regulated savings accounts and even more compared with ordinary savings accounts. Deposit rate of the LEP and livret A savings accounts Deposit rates of savings accounts (en %) In % Ordinary savings account Regulated savings account LEP savings account July Aug ,42 N.A. 1,75 1,25 2,25 1,75 17

18 4- Who are the holders of the «livret d épargne populaire» savings account? 18

19 Holders of the «LEP» savings account LEP savings account are mostly held by retired people Breakdown of holders of the LEP savings account (millions of accounts) 19

20 Holders of the «LEP» savings account... whose LEP savings accounts have the highest outstanding amounts Breakdown by age group of average outstanding amount of LEP (euros) 20

21 Holders of the «LEP» savings account 35,6 % of LEP savings account have an outstanding amount over the ceiling due to the capitalisation of interests. Breakdown of LEP savings accounts by outstanding amount (en %) 21

22 Conclusion 22

23 Conclusion The LEP savings account is one tool among others of the national authority implementation of a policy to fight against poverty and promote social inclusion. It is a complement to other regulated savings accounts such as the livret A savings account that are also able to promote low income households savings. 23

24 Thank you 24