French households continue to save heavily during the summer of 2024

The summer of 2024 was marked by a continued trend among French households toward saving. The Livret A, the Livret de Développement Durable et Solidaire (LDDS), and the Livret d’Épargne Populaire (LEP) all saw an increase in deposits in July. 

With inflation on the decline, these regulated investments now offer a positive real return, making them particularly attractive. Net inflows into the Livret A in July totaled 1.7 billion euros, compared with 1.23 billion euros in June and 2.16 billion euros in July 2023. Since 2009, only three instances of net outflows have been recorded in July for the Livret A (-0.97 billion euros in 2015, -1.08 billion euros in 2014, and -1.07 billion euros in 2009). Over the first seven months of the year, Livret A deposits totaled 11.71 billion euros, compared with 28 billion euros in 2023, an exceptional year.
 

The July results show households’ continued interest in regulated savings accounts. These deposits are significantly higher than the average over the past ten years (1 billion euros for the month of July between 2014 and 2023). The French seem reluctant to dip into their savings to increase their consumer spending, unlike Americans, for example. Faced with the political uncertainties arising from the legislative elections held on June 30 and July 7, households are adopting a wait-and-see approach and exercising caution, making the Livret A a safe haven.
 

The Sustainable and Solidarity Savings Account Remains Strong
The Sustainable and Solidarity Savings Account (LDDS) recorded inflows of 730 million euros in July, compared with 590 million euros in June and 600 million euros in May. In July 2023, deposits for this product totaled 970 million euros. Over the first seven months of the year, deposits reached 5.61 billion euros.
 

As with the Livret A, the LDDS’s performance has exceeded the average over the past few years. Between 2014 and 2023, average deposits totaled 300 million euros. Since the Caisse des dépôts et consignations began compiling statistics, there have been only two instances of net outflows for the LDDS in July (2009 and 2015).
 

New Records for Outstanding Balances on the Livret A and LDDS
In July, the Livret A and LDDS once again set new records for outstanding balances, reaching 427 and 155.1 billion euros, respectively, bringing the total for both investment vehicles to 582.2 billion euros.

In July, the Livret d’Épargne Populaire (LEP) posted a net inflow of 460 million euros, down from 570 million euros in June. This net inflow followed two net outflows (-40 million euros in May and -270 million euros in April).
 

The decrease in the LEP’s rate of return—from 5% to 4%—announced in July and effective as of August 1, has had no noticeable effect on deposits. Households with modest incomes continue to want to save amid economic and political uncertainty. The outstanding balance of the LEP has also reached a record high of 76.9 billion euros.
 

A Delayed Return to Normal
The household savings rate in France in 2024 remains nearly three percentage points above the level seen before the 2020 health crisis. The Livret A savings account is the main beneficiary of this propensity to save, with outstanding balances increasing by 129 billion euros between December 2019 and July 2024. A decline in the savings rate and in regulated savings inflows has been expected for several months but has yet to materialize. During the period of inflation, households prioritized saving—as is often the case—at the expense of consumption. Consumption has not yet benefited from disinflation because households remain skeptical about the economic outlook, and their confidence, as measured by INSEE, remains low.
 

Outlook for the Second Half of the Year
Traditionally, the second half of the year—with the start of the school year, local tax payments, and the holiday season—is more focused on spending than on saving, although this trend has been disrupted in recent years. This year, the political climate—with possible tax increases—could prompt households to err on the side of caution once again.