Inflation: should you favor your Livret A or your life insurance?

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Will save, will not save? In times of inflation, it can be particularly difficult to save money. Prices are rising steadily, both at the supermarket and at the pump, and bills are skyrocketing. The government, as Planet has already explained in the past, is even forced to come to the aid of French men and women so that the country’s economy does not collapse, for lack of strong enough demand. And the executive to maintain certain potentially very expensive devices, such as the tariff shield recently mentioned by Gabriel Attal, the Minister Delegate for the Budget. In front of the microphones of France Inter, the latter assured that Emmanuel Macron’s team would continue to “protect the French and their purchasing power”. “I plan for 2023 budgetary appropriations which will make it possible to support the most modest”, he further indicated, as France Bleu recalls on its site.

Therefore, for savers, certain crucial questions arise: how to continue to put money aside? Should we review our heritage strategy from top to bottom? Stop feeding his Livret A and break his life insurance in favor of more profitable investments, which will suffer less from inflation? It is clear that these do not allow French women and men to earn money…

However, assures the economist Alexandre Delaigue in our columns, it is not necessarily a good idea. “If you stop feeding your regulated savings account, you have to plan something else or invest that money. A current account or a safe would be a gross error: it is the assurance of devaluing your savings even more”, he warns from the outset, not without emphasizing that the situation is not endemic. Concretely, he continues, this means that the inflationary wave remains punctual… and that it is better to turn around rather than make bad decisions.

But if you have to keep your life insurance or your Livret A, which one should you opt for?

The Livret A and life insurance are not perfectly comparable investments. However, informs Mieux Vivre-Votre Argent, it is possible to dwell on their respective returns to facilitate decision-making for the saver. It is clear, moreover, that since the revaluation of the first, its rate of return appears globally a little higher than that of the fund in euros for life insurance.

On average, our colleagues specify, the net performance of life insurance contracts is between 1.60% and 2%. These are the so-called “flagship” contracts of the product that are found at the top of the basket, they add. What to follow, at best the yield of the Livret A and sometimes even to match it. But never exceed it…

That being said, it should also be remembered that the return on life insurance funds in euros is on the rise after years of erosion, which could in any case reassure savers.

The Livret A, recalls the comparator Selectra on its site, is a savings product which has the advantage of being regulated. It is therefore the state that sets the parameters that matter to savers: the rate of return, the ceiling or the conditions of access, for example. It has a number of advantages, such as being tax-free and very flexible, allowing investors to get their money back at any time.

It is a so-called “precautionary” savings product.

Life insurance, for its part, aims to build up capital over the medium or long term, in order to allow the transmission of it or the financing of a personal project to come. It has a particularly advantageous tax regime when it comes to inheritance and allows more flexibility in terms of remuneration… since it is possible to opt for different degrees of risk: the fund in euros, which is the less profitable and the safest, as well as the units of account, which are more profitable but also more dangerous.