Saving money in France: What’s the best option?

Ever wondered what's the best thing to do with your savings in France? As part of our "Ask The Experts" series we've invited expat financial adviser Jonathan Cooper to tell you what to do with your hard-earned euros.

Saving money in France: What's the best option?
What's the best thing to do with your savings in France? Photo: Shutterstock

With the interest rates on Livret A Savings Accounts dropping as low as one percent in August and set to go even lower in the coming months, the prospects of making your savings pay, do not appear rosy. At least at first glance.

But there are other options for where to invest your hard-earned euros.

We asked Jonathan Cooper from the Paris office of independent financial advisers, The Spectrum IFA Group, to tell us, in his opinion, what the best option is.

Cooper: “If you have anywhere from €20,000 to multi-millions in savings then you should think about opening a life insurance policy (Assurance Vie).

"Around €3.2 trillion is invested in Assurance Vie and every French bank will offer it, as well as international providers like Prudential and SEB Life, who provide French compliant Assurance Vie’s with English written contracts.

"For English speakers, I would recommend going through an international insurance company rather than a French bank or French insurance company.

“It is basically a long term savings plan which allows you to invest in funds of your choice. 

“You are able to withdraw your money at will and, although some policies have early redemption penalties, most have set limits where no penalty is incurred – usually between 5 and 75% for the first 5 years and then no penalty at all. However, why would you set up a lump sum policy and then withdraw it a few months later?

“The French Assurance Vie is like having a UK unlimited ISA (interest free savings account). It grows tax-free from day one and you will only pay tax on the gain element of what you withdraw, when you withdraw it.

"There is a part of the French tax return which asks if you have set up any Assurance Vie policies during the year, and if you have received any income from the policies.

“Personally, I am not a fan of monthly savings plans, they tend to be expensive and inflexible. Signing up to a plan for between 10 and 20 years where you are committing to a monthly amount which, while affordable now, may not be in 5 years time, is not a wise decision.

"I would urge you to build up your savings in a Livret A.  When you have between €20,000 and €30,000, invest it as a lump sum in an Assurance Vie and then top up when you have sums of around €7,000 to €10,000.

 “Assurance Vie policies are also a great way of Estate Planning.

“In short, Assurance Vie is the most tax efficient, flexible, client-friendly investment model available in France.

It is, however, just a model. What makes the money grow is the choice of underlying investments, which we take very seriously. Every client is given a full financial review and evaluated on their attitude to risk – because funds, like property and all types of investment, can go down as well as up.

"Every client is different and we, as a group, work with our clients on the investment strategy that suits them.”

Jonathan Cooper is with The Spectrum IFA Group, which specialises in assisting expatriates moving to France or already living here with tax efficient solutions for savings, investments and pensions. For more information visit their website by CLICKING HERE. If you are living in or around the Ile-de-France or northern France you can email Jon direct on [email protected] or call on 07 50 87 59 69.

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How much motorists in France will pay in fees in 2023

Car registration varies depending on where you live, the type of vehicle you have and how polluting it is - here's how much you can expect to pay in 2023.

How much motorists in France will pay in fees in 2023

Anyone who has bought a car in France will know that they have one month from the date of purchase to register the vehicle in their name via the ANTS website.

READ ALSO What you should know when buying a car in France

When you register for your vehicle’s carte grise, you will be asked for a fee. How much that costs depends on the type of car you have bought, how green it is, and where you live.

The total cost is made up of the following:

  • Regional tax;
  • Tax for the development of vocational training in transport;
  • Tax on polluting vehicles;
  • Fixed tax of €11;
  • Fee for the delivery of the registration certificate.

Each of France’s 13 regions sets their own regional tax rate every year – which this year range from €55 in Brittany (€4 higher than in 2022) to as little as €27 in Corsica. Six regions offer 100 percent regional tax discounts for ‘clean’ electric vehicles, while another two cut their fees by 50 percent. 

You can find a table of rates here

To calculate how much you have you pay, you need to know the cheval fiscal of your vehicle. No, that’s not a horse who is also a tax expert, it is “taxable horsepower” of your vehicle. You can find this on your registration certificate, where it is known as cheval vapeur or CV. 

This unit of measurement classifies cars according to their power for tax purposes. Each category of car in circulation is assigned a specific rate.

To calculate your pollution tax, multiply the rate of 1 fiscal horsepower of the region where you live by the fiscal power of the vehicle.

Alternatively, use this simulator

Your vehicle’s CV is also important for calculating the pollution tax. More powerful ICE cars are very recognised as the most polluting – and this tax is intended to motivate buyers to consider 100 percent electric, hybrid, or smaller vehicles.

The good news is that, if you are buying a car from a dealership, they should deal with all this on your behalf as part of the sale process. In theory, you can also ask any dealership to help you out – they may charge an additional fee on top.

You can estimate the total cost of your carte grise using the government’s online simulator here.

Other costs

Running a car in France involves several other costs beyond the obvious insurance and fuel costs.

Once your car is more than four years old, it needs regular vehicle safety checks known as contôle technique (roughly equivalent to an MOT in the UK)

READ ALSO How to save money on your contrôle technique

As well as toll fees if you want to drive on autoroutes, you will also need a Crit’Air sticker if you want to drive in the larger towns and cities. This sticker – which assigns a number to your vehicle based on how polluting it is – only costs around €5, but not having one can net you a larger fine.

How the Crit’Air vehicle sticker system works

And of course you will need to obey the rules of the road in order to avoid fines, points on your driving licence or both.

These are the offences that can cost you points on your driving licence in France