2023, year of return to grace of the ELP? Largely neglected in recent years in favor of the Livret A or life insurance, the housing savings plan could regain its appeal with savers. For the first time since 2002, his rate of pay will indeed be increased by 1 to 2%, in accordance with the recommendations of the Banque de France. Beyond remuneration, holding a PEL could above all become attractive again in a context of sharp acceleration in the rise in interest rates.
Two separate rates
This is indeed the great specificity of the PEL: created in 1969 to support households wishing to become owners, it is not only used to remunerate the money of savers but also to guarantee a borrowing rate for a future property purchase. Concretely, the PEL, which is much more constrained than the livret A – it imposes a sum of €225 at the opening, and a minimum annual contribution of €540 – displays two rates: a first defining the remuneration of the savings which is deposited there (which was 1% since August 1, 2016) applicable throughout the holding of the account, and a second blocking the borrowing rate, currently at 2.2% higher, for the next fifteen years.
In detail, the formula that allows you to calculate the amount that you can borrow at the end of your PEL is complex. This depends on the interest accumulated throughout the life of the plan and the duration of the loan. The shorter it is, the more it is possible to borrow a large sum. Weakly liquid – the money saved can only be taken out once and automatically leads to the closure of the account – the PEL is also capped at €61,200 and cannot give rise to a loan of more than €92. 000 €.
A return always lower than that of the booklet A
Throughout the past decade, real estate rates were so low, and remuneration so low, that the collection of this star product of the 1980s collapsed. According to the latest annual report on regulated savings, the PEL holding rate (18% in 2021) has been in constant decline since 2016, the date from which remuneration fell below 2%. At the end of 2021, the number of PELs stood at 12.2 million, for a total outstanding amount of nearly 300 billion euros, compared to 500 billion for the Livret A and the LDDS (sustainable and solidarity development booklet) .
From 1is January, savings deposited in newly opened PELs will therefore be remunerated at 2%, i.e. the current level of the Livret A account. of the real return, precautionary savings are once again favoured.
However, unlike the preferred investment of the French, the PEL has been taxed at 30% since 2018, which significantly reduces its yield (1.4%). In addition, it should return very quickly under the booklet A, which must be revalued on February 1 next to 3% at least. ” While the passbook A revaluation formula is based on the consumer price index, that of the PEL depends on market rates, which are currently much lower than inflation. », specifies Philippe Crevel, the president of the Cercle de l’épargne.
Protect yourself against rising interest rates
In the end, depending on the nature of their project, households do not necessarily have an interest in waiting until January 1 to open a PEL: while the saver will prefer the highest possible rate of return, the future borrower will seek to protect against an explosion in interest rates. In one year, twenty-year real estate rates have gone from 1% on average to more than 2%, and could reach 3% in 2023.
“That is why, for people who have a real estate project for the years to come (it takes four years of holding a PEL to be able to benefit from the loan at preferential rates, editor’s note), it will be more interesting to keep their old PEL or to open one before the end of 2022, in order to benefit from the borrowing rate at 2.2%», specifies Philippe Crevel. For PELs opened from 1is January, the rate of home loans that will be backed by them will increase from 2.2 to 3.2%.
As for holders of old PELs, they obviously have an interest in keeping them for as long as possible. According to the Banque de France, 42% of PELs would have an interest rate equal to or greater than 2.5%, and 5% of them (representing 11% of outstandings) would be remunerated at a rate at least equal to 5.25%, or above the popular savings account (LEP), reserved for the most modest (at 4.6%).
——
In February, expected rise in the Livret A rate
The livret A should see its rate of remuneration, currently set at 2%, increase significantly on February 1, 2023. “We will do the calculation in January and the Minister of Economy Bruno Le Maire will decide on the new rate”, specified at the end of December the Governor of the Banque de France François Villeroy de Galhau. The rate increase is expected to be even greater for the Livret d’Epargne Populaire (LEP), a means-tested savings product whose rate is currently set at 4.6%. The rate of the two booklets is calculated taking particular account of inflation. It was already raised in August, from 2.2 to 4.6% for the LEP and from 1 to 2% for the booklet A.