Why your interests will be worthless to your purchasing power in 2024

In 2024, the Livret A rate is maintained at 3% throughout the year. With inflation falling, this savings product, much appreciated by the French, could help them put some money in their pockets, but the revaluation of two taxes could change the situation.

According to the latest figures from the Banque de France, the average outstanding amount of Livret A is 6,351 euros (limit is €22,950). The rate is maintained at 3%, so savers should earn an average of 190 euros in 2024 thanks to this savings product. Still, according to Bank of France forecasts, inflation should fall to 2.5% this year. There is good news for savers who should benefit from a small amount by the end of the year. But this is without regard to the increase of the two taxes which must be counterbalanced and therefore cancel the interest on the levee A.

Increases in TICFE and property tax levy rates can make that interest worthless

Indeed, two taxes will increase in 2024. First, the Domestic Final Consumption Tax on Electricity (TICFE). With the establishment of the Tariff Shield, which was intended to protect the French against the rise in electricity prices about 2 years ago, the government decided to reduce this tax to its minimum rate of 0%. But the situation will change on February 1. Indeed, the government has announced a return to the “normal” rate of this tax which will affect the electricity bill price. On average, a French person will therefore pay 130 euros more on his annual electricity bill.

Apart from TICFE, property tax is also affected by the increase of at least 3.9%. In fact, this rate corresponds to the annual revaluation of cadastral values ​​as well as possible additional rate increases applied in certain municipalities of France. As a result, for an owner whose property tax is on average 889 euros, the increase will be up to 35 euros.

If we combine these two tax increases, it gives us an average of 165 euros more per year. With an average estimate of 190 euros for the year 2024, the benefits generated by Leverate A will be canceled out by increases in property taxes and the domestic final consumption tax on electricity (TICFE). Obviously, these calculations are only relative.