Is Your French Retirement Savings Plan About to Change? Navigating the Future of the PER
Over 2.7 million French savers have embraced the Plan d’Épargne Retraite (PER) since its 2019 launch, drawn by its tax advantages and flexibility. But as we move into the second half of 2025, a wave of proposed changes – from revised taxation to stricter investment requirements – is raising a critical question: will these adjustments destabilize this increasingly essential retirement solution? Understanding these shifts isn’t just prudent; it’s vital to protecting your future financial security.
The PER’s Rapid Rise and Growing Scrutiny
The PER quickly became a favorite among French savers thanks to the Pacte law, offering attractive tax incentives, the ability to transfer existing retirement savings (Perp, Madelin, Article 83), and flexible withdrawal options – either as a lump sum or a lifetime annuity. This popularity, however, hasn’t gone unnoticed. As billions of euros flow into PER accounts, the French government is now focused on preventing tax loopholes and ensuring the long-term sustainability of the system.
What’s on the Horizon? Key Regulatory Changes
Several key changes are currently under discussion in Parliament, poised to reshape the PER landscape. Here’s a breakdown of what you need to know:
Taxation: A Shift Towards Equity
The current tax benefits of the PER – deductions on contributions, a 10% tax on capital gains, and full exemption after eight years – are likely to be adjusted. Proposed changes include a gradual reduction in taxation on capital withdrawals, particularly for smaller retirees, and harmonization of output ceilings to avoid double taxation with life insurance. There’s also a push to incentivize opting for a life annuity with a guaranteed minimum payout.
Restrictions on Transfers and Contributions
To curb aggressive competition between providers, transfer conditions between PER contracts are expected to become more stringent. However, there’s good news for long-term savers: contracts exceeding €2,500 will automatically receive reimbursement of transfer fees starting in 2026. Perhaps the most significant change is the mandatory inclusion of at least 20% of assets labeled ISR (socially responsible investment) in all new PERs, demanding greater scrutiny of your contract’s composition.
Protecting and Optimizing Your PER: Actionable Steps
Don’t wait for the changes to take effect. Proactive savers are already taking steps to secure their retirement funds.
Anticipate and Secure
Review your current contract, examining your withdrawal options (capital vs. annuity, early access possibilities). Secure portability before restrictions tighten, compare transfer clauses, and anticipate the impact of potential tax legislation changes.
Essential Reflexes for Maximizing Your PER
Choose a PER manager who prioritizes ESG diversification, closely monitoring profitability and climate reporting transparency. Take advantage of any remaining free transfer windows before the end of the year. And crucially, simulate different withdrawal scenarios – capital versus life annuity – to refine your strategy based on your projected future tax bracket.
The Future of the PER: Transparency, Responsibility, and ESG
Experts agree that the post-2025 PER will be more transparent, responsible, and heavily focused on ESG (Environmental, Social, and Governance) principles. This shift towards sustainable investing is reassuring for savers who want their money to align with their values. However, it also requires vigilance regarding taxation and evolving contractual clauses. For a deeper dive into ESG investing, explore resources from the Autorité des Marchés Financiers (AMF).
Who Will Be Most Affected?
Holders of PERs subscribed before 2026 may benefit from more favorable legacy rules. New subscribers from January 2026 will face stricter standards, including ISR requirements and supervised transfers. Self-employed individuals (formerly Madelin) will see tax harmonization simplifying withdrawals. Young workers, attracted by transparency and sustainability, will find contracts better aligned with their values but must remain mindful of tax implications.
Staying in Control: Key Areas to Monitor
The current environment demands a proactive and informed approach. Experienced savers should schedule regular reviews to adapt to changes. Pay close attention to:
- Future taxation of withdrawals: Compare your profile before and after the reforms.
- The ISR component of your contract: Ensure transparency and avoid greenwashing.
- Portability and transfer costs: Capitalize on opportunities to optimize.
- Early exit options: Maintain security for unexpected expenses or real estate purchases.
Don’t let regulatory uncertainty derail your retirement plans. Anticipating transfers, rereading your contract, seeking advice from your financial manager on the ISR transition, and simulating exit scenarios can prevent unwelcome surprises. A well-managed PER remains a cornerstone of modern retirement savings, offering peace of mind in an evolving financial landscape.
What steps are you taking to prepare for the changes to the PER? Share your thoughts and questions in the comments below!
