LEP: this investment forgotten by young people which earns them twice as much as the Livret A

Who is missing from the Popular Savings Account (LEP)? If the Banque de France recently welcomed the “historic breakthrough» of this regulated booklet, which reached 10 million holders last August, only a little more than one in two eligible people now benefit from the best guaranteed investment on the market. To achieve the objective of 12.5 million holders by the summer of 2024, it is particularly the youngest who must be won over.

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Indeed, as the Banque de France recalled during a press conference on October 31, adults under the age of 25 represent less than 2.5% of LEP holders (and only 1% of capped LEPs). ), even though they account for 10% of the French population. However, the vast majority of these nearly 7 million people are eligible to open a LEP.

18-25 age groups are the poorest segment of the adult population

According to INSEE data, it is the 18 to 24 year old group that has the lowest average standard of living among adults (21,630 euros x). It is also the population most affected by poverty, with around a quarter of 18-24 year olds receiving less than 1,102 euros net per month (60% of median income). Above all, INSEE tells us that the median annual income of this age group is 18,890 euros, which means that at least half of those who make it up are indeed eligible for the LEP, which is reserved this year for people earning less than 21,393 euros per year (which represents more or less less than 1,700 euros net per month).

To summarize, only 250,000 young people aged 18 to 25 currently hold a LEP, while at least 3.5 million of them are entitled to it based on their income. Of course, a low level of income often goes hand in hand with a low level of savings. “What’s the point of opening an LEP if I have nothing to put on it?” could oppose us the youngest. Well, you can start by transferring the savings you keep in your Livret A account.

250,000 LEP versus 5 million Livret A

Many 18-25 year olds actually have one, even though they would have every interest in having a LEP instead. According to the latest regulated savings report published each year by the Banque de France, this age group held, at the end of 2022, 9% of Livret A accounts, while they represent, as a reminder, only 2.5% of LEP holders. Out of a total of 55 million Livret A accounts opened, this means that 4.9 million people aged 18-25 have a Livret A account in their name. And they are not empty! With 5% of the total outstanding, we can estimate that adults under 25 have on average 7,300 euros of savings placed in their Livret A.

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This difference in holding between the two booklets is explained in particular by the fact that the Booklet A can be opened from birth, unlike the LEP, which can only be opened upon reaching the age of majority. Thus, when they turn 18, savers do not always think of swapping the Livret A opened by their parents or grandparents for a LEP, even though they have every right to do so, as long as their income allows it, and this, regardless of their status (students, apprentices, employees, interns, etc.).

A Livret A which nevertheless brings them half as much…

And beyond having the right to do so, above all, at this moment, they have a great interest in doing so. The two regulated savings accounts enjoy the same advantages (guaranteed and always available savings, freedom of payments and withdrawals, tax-free interest, etc.) but the LEP is twice as profitable as the Livret A. Currently, the latter displays a rate of interest at 3%, when it is 6% for the LEP. Let’s take the savings held on average by 18-25 year olds in their Livret A: 7,300 euros. Between August 1, 2023 (date of the last revision of the LEP rate) and December 31, this sum placed in a Livret A generated 91.25 euros in interest. It would have been double on a LEP: 182.50 euros. Without appeal.

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What’s more, even if the LEP rate were to drop on February 1, don’t panic, it will always be higher than that of your Livret A. Indeed, the decree of January 27, 2021 which sets the remuneration rule for LEP emphasizes that the latter must always, at a minimum, have a rate 0.5 points higher than that of Livret A. As long as you are eligible for LEP, you will therefore never lose out.

Even with little savings available, it is therefore always interesting to open a LEP if you are entitled to it, and even more so if you have savings on a Livret A which earns you half as much. To benefit from this regulated booklet, simply contact your bank, which, as the Banque de France recently reminded, must be responsible for verifying your eligibility with the tax administration. So you don’t even need to submit a tax notice to him. No more excuses!