Pension payments, interest rates and funeral costs have changed significantly
The start of the new year brings with it a number of changes. The connection has previously made detailed changes in areas such as healthcare, residency and driving.
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Below we describe five of the biggest changes in the pouvoir d'achat (purchasing power or cost of living) for those living in France this year.
French pension increase
Millions receiving a French pension saw a 2.2% increase on January 1.
Former Prime Minister Michel Barnier wanted to postpone the indexation of this year's pensions to inflation levels – a process that occurs automatically outside the annual budget – until July, reduce the annual increase to 1.5% and have most pension increases only take effect from July 1 let occur in the second half of the year.
His plans, part of his government's proposed 2025 budget, ended with his resignation, meaning pensions were increased to previously expected levels from January.
This corresponds to an average monthly increase of €15 per person.
Note that a minimum gross monthly salary of €1,782 per month for three months is required to “earn” a quarter (quarter) of French pension payments.
This increase corresponds to last November's minimum wage increase (both are equivalent) and should not affect full-time employees earning at least the minimum wage.
However, it may impact those whose monthly income is lower, such as part-time workers.
Read more: France's minimum wage will not automatically increase on January 1st
Changes to green home renovation grants
Changes have been made to the government MaPrimeRenov' Program that partially funds environmentally friendly home renovations.
Certain rules introduced last year for renovations of individual projects (Mono gestures) have been expanded.
These include financing the modernization of single-family homes (essentially not apartments) rated “F” or “G,” as well as a temporary end to the requirement for a Energy performance diagnostics (DPE) assessment for properties before an application.
However, the funding level for the lowest income households has been reduced from 70% to 50% in some cases, as well as for higher income households, even if the renovations result in a significant improvement in a property's DPE ranking.
Read more: French subsidies for home renovations are changing
New rules for tourist rentals
Short-term rentals, for example in gîtes or through websites such as Airbnb, are subject to further restrictions this year.
In addition to possible restrictions on the number of properties that can be used for short-term rentals and the number of days they can be made available for rental, the tax allowances for owners who rent out such properties have been reduced to be closer to the allowances to match what is available for rental in the more traditional longer term market.
Read more: Airbnb rental laws are to be tightened in France
Interest rate reduction for newly opened savings accounts and late payments
The interest rate for a Housing savings plan (PEL, savings account for a house purchase) opened after January 1st fell to 1.75%.
Previously the rate was 2.25%.
The interest rate on the account remains fixed from the date of account opening and has historically fluctuated, reaching a low of 1% in August 2016.
Interest rate changes for other savings accounts, including the government-regulated tax-free Savings Account A, have not been announced, but they are widely expected to fall sometime this year.
Savings book A currently has an interest rate of 3%.
The late payment interest rate for individuals (legal interest rateor statutory interest rate) will fall from 8.16% to 7.21%. This is used in areas such as banking and real estate lending.
The tariff will be reassessed on June 30th.
Funeral costs are rising
The amount that can be deducted from the deceased's bank account to cover funeral costs if no appropriate funeral insurance is in place has increased from €5,000 last year to €5,910.
Read more: France changes its deadline rules for burials and cremations
More changes
Other changes that may have an indirect impact on expenditure include the clearing of garden undergrowth (statutory clearing obligations) and driving bans in four French cities.
You can read about these and other changes below.
Read more: 15 changes in France from January 1, 2025