LEP 2022. The rate served by LEP will more than double from August 1st. What to compensate for the level of inflation? What new rate? We tell you everything.
[Updated July 19, 2022 08:50 AM] People’s passbook will increase again in 2022 to take inflation into account (5.8% in June YOY). A so-called “automatic” increase, a fate also reserved for its big brother, the Livret A. The LEP rate will more than double, from 2.2% to 4.6% on August 1, 2022. Good news for some , insufficient for others, this increase will not compensate for inflation. Neither for the month of June 2022 (5.8%), nor for the year as a whole, the consumer price index should well exceed 5% on average. The Minister of the Economy Bruno Le Maire formalized this increase in the LEP last Thursday, ratifying the recommendation of the Governor of the Banque de France, François Villeroy de Galhau a few hours earlier: “The popular savings account rate will go from 2.2% to 4.6%. LEP is the most effective investment to hedge against inflation.” For once, difficult to prove the tenant of Bercy wrong, the rate of pay displayed by the LEP is actually the closest to the level of inflation, all savings books combined.
Contacted last week by Linternaute.com, the Director of Cercle de l’Epargne Philippe Crevel also told us that there was a strong probability that the LEP rate of return would increase significantly this year: “For LEP, it will be 4.6 % The rate of return is equal to the inflation rate for the last six months”. Something to give hope to French savers. As a reminder, the popular savings account (LEP) is a guaranteed and tax-free investment, with an interest rate that is twice that of the booklet A. You can benefit from it if your income does not exceed certain ceilings. In 2022, 7,000 LEPs will be opened in France for a capacity of 15,000 beneficiaries. Not necessarily put forward by banking establishments because of its relatively high management costs, the LEP is today a good alternative to taxed savings books for short-term savings.
The LEP rate has been 2.2% since February 1, 2022. It has been frozen for two years. However, it was lowered to 1% in February 2020, a decision which results from the drop in the yield of the Livret A.
From August 1, 2022, the rate served will rise to 4.6% to take inflation into account, as announced by the Minister of the Economy Bruno Le Maire, on July 14 in the columns of Le Parisien.
Want to know more about alternatives to regulated passbooks? Consult our dedicated file without delay:
It is possible to invest up to 7,700 euros in an LEP, excluding capitalized interest. It is therefore possible to continue to capitalize interest once the ceiling has been reached. Remember that no operation can have the effect of rendering the account in debt. The minimum initial payment on your LEP is set at 30 euros.
Also, your reference tax income must not exceed certain limits, which are set according to the composition of your household. Here are the caps that apply this year:
When the saver’s income exceeds these ceilings during a year, he can keep his LEP if his income for the following year falls below the eligibility limit.
The role of the Livret A can be likened to precautionary savings. It is advisable to place two to three months’ salary on this savings product. Revalued by 1% on February 1, 2022, the livret A has a higher ceiling than the LEP, 22,950 euros for an individual. Only one booklet A per person is authorized.
However, the LEP remains more than interesting if you have a modest income. In addition, the rate served is more than twice as profitable as that of the Livret A, 2.2% remuneration since February 1, 2022. “It is a product with a capital guarantee and total liquidity which is extremely attractive. There is no equivalent in terms of remuneration on short-term savings,” analyzes Philippe Crevel, Director of Cercle de l’Epargne.
Only persons whose tax residence is located in France can request the opening of a LEP. Only one LEP can be subscribed per person, within the limit of 2 booklets per tax household. The opening of a popular savings account is then conditioned on the level of income of the subscriber. It is also necessary to be of legal age and no longer be attached to the tax household of his parents.
In order to facilitate access to this savings product, Bruno Le Maire had announced a simplification of the opening conditions. “Presenting a tax notice to your bank when opening a LEP will no longer be mandatory,” he explained. “The same goes for the annual audits. It will be up to the bank to verify the eligibility of the saver with the tax authorities.” Remember that since March 15, 2021, your bank can directly take care of contacting the tax authorities to verify that you meet the conditions for opening and holding a LEP.
The taxation of the LEP is modeled on that of the Livret A. This savings product is totally tax-free. In other words, the LEP is not subject to income tax, social security contributions including the general social contribution (CSG) and the social debt repayment contribution (CRDS), or the 30% flat tax on capital income. De facto, the interest received is not to be mentioned in the annual tax return.
You have the possibility of requesting the closure of your LEP at any time and free of charge according to the terms and conditions provided for in your contract. Simple letter, registered letter with acknowledgment of receipt or form are possible. LEP remains open as long as you meet the eligibility conditions related to your income tax. To do this, you must send a tax notice to your bank each year unless it decides or suggests that you contact the tax authorities directly to verify that you comply with the conditions for holding this tax. savings product.
