The old housing savings plans, “real annuity” which the Court of Auditors wants to tackle

The old housing savings plans, "real annuity" which the Court of Auditors wants to tackle

Small gold mines for savers who subscribed before 2011, old housing savings plans (PEL) are in the sights of the Court of Auditors which asked Monday that their remuneration be reduced taking into account its cost for the State and the banks. Currently, the PEL, whose remuneration is fixed once and for all when subscribing to the contract, seems not very advantageous with a rate of 1% since 2016, while a booklet A brings in double (2%) and a booklet popular savings (LEP) 4.6%.

But this has not always been the case: before 2015, money placed on a PEL yielded more than 2%. Its yield had even risen to 3.27% between 2000 and 2003 and exceeded 4% before 1994. In theory, the PEL is a medium-term investment: it makes it possible to obtain a loan on favorable terms to buy a real estate or finance works. Since 2011, it is only possible to feed it for 10 years and to accumulate interest for 15 years.

PEL subscribed before 2011 continue to accumulate interest for an unlimited period, at the rate set at the time of the contract, which pushes some savers to keep them longer. A situation denounced by the Court of Auditors in a report published on Monday: “The ELP is diverted from the historical objective of home ownership to become a long-term savings product,” she argues. According to the institution, old PELs are akin to “a real annuity, in particular for the benefit of older holders with high outstandings”.

Last year, an average remuneration of 4.5% for old PEL

This situation has been denounced for several years by the banks, which pay the interest. “These old PELs are no longer in line with the market today and constitute a significant cost for the financing of the economy”, assures the French Banking Federation (FBF) to AFP.

According to the Banque de France, PELs opened before 2011 represented 107.7 billion euros last year with an average remuneration of 4.5%, against 3.04% for all PELs. In a letter to the Court of Auditors published on Monday, its governor François Villeroy de Galhau describes the situation as an “anomaly”.

No financial return for the state

PELs also cost the state money because those opened before 2018 are exempt from income tax until their thirteenth birthday and allow, when spent on a loan, to obtain a bonus of State (up to a maximum of 1,525 euros), the amount of which depends on the interest received. The Court of Auditors estimates at 411 million euros the cost for the State in 2022 for these old PEL “without the State obtaining any financial return or directing the resource towards jobs of general interest as it is the case for regulated booklets”, she underlines.

She “recommends thinking about a device for removing” the advantage of old PELs over other savings products, which she considers “little justified and even disproportionate”. The Minister of the Economy Bruno Le Maire replied on Monday that he had “taken note” of the court’s recommendations, contenting himself with saying that the Court’s finding on PELs “can legitimately lead to questions about the efficiency of the allocation of this housing savings”.

For the consumer association CLCV: “A commitment is a commitment”

Review the rates of old PEL is not easy because they are governed by contracts between individuals and banks. The subject is all the more sensitive as inflation, which reached 5.8% in August over one year according to INSEE, is chipping away at the real earnings of savers.

“A commitment is a commitment and it must be respected”, reacts to AFP François Carlier, general delegate of the consumer association CLCV. If the banks decided to lower the remuneration for old passbooks, this would lead to major litigation and would damage their image vis-à-vis their customers, underlines the Court of Auditors.

It therefore identifies other solutions, such as a negotiation between the banks and their customers to close the PEL, in return for compensation, or a modification of the contracts by law in the name of the general interest, in exchange for a commitment from the banks. to finance priority projects, such as the ecological and energy transition. The FBF ensures that “the profession is open to participate in the work that the Court recommends to the public authorities” and favors a regulatory modification of the performance of old PELs.

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