The Livret A and the Livret de développement durable, which nevertheless guarantee low interest rates, have been a historic success this year.
The woolen socks are full. In a context of economic and health uncertainties linked to Covid-19, the year 2020 should remain in the annals of precautionary savings records. The Livret A and the Livret de développement durable et solidaire (LDDS), investments which nevertheless guarantee low interest rates, have been a historic success this year.
Between them, the Livret A and the LDDS thus collected more than three billion euros in net in November, and more than 35 billion since the beginning of the year. If we include the amount of deposits dormant in the current accounts of the French this year (around 50 billion euros) we approach 100 billion in savings at the end of November, note The Parisian . According to the latest estimates from the Banque de France, total savings could even reach, at the end of 2020, the record figure of 130 billion euros.
Containment and worries about unemployment
This saving trend is expected to continue in 2021. “ Savings will remain high “, Foresees François Villeroy de Galhau, the governor of the Bank of France. According to his estimates, the French should again set aside 70 billion euros more in 2021. Which would mean that in two years, 200 billion would have been withdrawn from the economy and consumption. That is more than the amount of the stimulus plan.
This “explosion“Savings are due”basically just having trouble spending“, Especially during the first confinement, explained to AFP Valérie Plagnol, economist and president of the Circle of Savers. Another factor: “Surveys show real concern over unemployment“, Encouraging households to form themselves”precautionary savings». «In the abnormal context of 2020, households do not want to commit to the long term and therefore prefer liquid products. This priority penalizes the first French savings product, life insurance», Adds Philippe Crevel, CEO of the Cercle de l’épargne.
The neglected life insurance
Indeed, life insurance, the first investment in France, is the big loser of this year 2020. Between January and November, the French withdrew 7.3 billion euros (compared to a positive net inflow of 23.3 billion euros over the same period in 2019). “The year 2020 is paying off the consequences of confinement and the crisis, with marketing made difficult, but also effects on the behavior of savers. Precautionary savings are booming in connection with the uncertainties that push households to fill their precautionary reserves», Analyzes Franck Le Vallois, Managing Director of the French Insurance Federation.
What will become of the woolen socks? “French households with significant liquidity should make trade-offs in the coming months, especially if the health and economic situation stabilizes“Anticipates Philippe Crevel. But despite the government’s consumer injunctions, difficult to predict. Especially since this savings is unequally distributed. According to a study by the Economic Analysis Council (CAE), half of the additional savings were accumulated by the wealthiest 10%, while the poorest households tend to be in debt.
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