In 2020, French savings reach record levels

A bank note (illustrative image).

-

Between health crisis and economic crisis, 2020 is definitely a record year for the savings of the French, who have invested 90 billion euros more than last year, according to the Banque de France.

A record level that hides strong disparities.

All the experts interviewed by AFP agree that the year 2020 represents “unheard of” in terms of savings behavior in France.

From 15% in the fourth quarter of 2019, the savings rate of the French, already high compared to the European average, rose to 26.7% in the second quarter, according to INSEE.

And while the third quarter could show a slight decline, it should not return to its pre-crisis level, experts believe.

During confinement, difficulties ... to spend

The Governor of the Banque de France François Villeroy de Galhau revealed in an interview with

, published Thursday evening, that over the first three quarters of the year, the Covid-19 crisis had generated additional savings for the around 90 billion euros, or 4% of GDP.

By way of comparison, the French had saved 143 billion euros in 2019.

This "explosion" of savings is due "essentially to the difficulty simply to spend", especially during the first confinement, explained to AFP Valérie Plagnol, economist and president of the Circle of Savers.

Another explanatory factor, "surveys show real concern about unemployment", encouraging households to build up "precautionary savings".

The disenchantment with life insurance is growing

As a result, the most liquid investments have performed well. The Livret A has seen a net inflow of almost 25 billion between January and the end of October, double that observed during the same period in 2019, and a historic record .

On the other hand, life insurance, the first investment in France with an outstanding amount of 1.753 billion euros, is the big loser of the year 2020.

Between January and October, life insurance experienced an outflow of 7.3 billion euros, "a historic drop", commented to AFP Franck Le Vallois, new director general of the French Federation of insurance.

This change is mainly due to a much lower collection, the level of benefits paid remaining very close to that of 2019, making it possible to rule out the hypothesis of massive withdrawals.

"Life insurance is one of the collateral victims of the health crisis because of its nature of long-term investment", commented in a note Philippe Crevel, director of the Cercle de l'épargne.

Stock rush

But the disaffection for this product had preceded the Covid-19 and can be explained by the drop for several years in the returns of funds in euros, very popular with savers some time ago, recalls Valérie Plagnol.

In contrast to precautionary savings, financial savings also performed well.

According to a quarterly report from the BPCE group, the securities were the subject between March and September of "opportunistic purchases" for 15.6 billion euros, against 1.4 billion on average in 2018 and 2019 over the same period.

With the markets collapsing in March, which have since rebounded, a number of savers saw an opportunity to invest cheaply.

No savings for households in great difficulty

The general increase in the savings rate observed this year, however, hides significant disparities within the French population.

According to a Kantar survey conducted for the Banque de France, "only one in four French people say they have been able to put more money aside than usual" during confinement.

And "some disadvantaged households have unfortunately not been able to save at all," lamented François Villeroy de Galhau.

The share of 18-24 year olds who said they were able to save more was slightly above the average for the French (40%), as was that of households earning more than 3,700 euros per month (39%).

And "men seem to have saved more than women" who have more precarious jobs, explained Valérie Plagnol, for whom we are witnessing "a widening of inequalities" and "a precariousness of part of the population ”.

According to her, we are witnessing with savings an illustration of the "recovery in K", more and more evoked by economists to describe the rebound of certain sectors while others are sinking into the crisis.

Economy

The regulated savings of the French will be used to finance the recovery

Economy

Bad news for the recovery, the French prefer to save rather than consume since deconfinement

• Economy

• Saving

• Covid 19

• Coronavirus

• Economic crisis