Saving rate in France reaches a record high since 1979, with 18.8% of earnings set aside during Q1 2025, as reported by INSEE.
Saving Spree: French Households Setting New Records in Q1 of 2025
It's a savings bonanza in France! An economic outlook note released by INSEE on a humpday in Q1 of 2025 revealed that the average French household managed to stash away 18.8% of their income — a figure last seen way back in 1979, barring the Covid era.
This financial frugality can be attributed to the global landscape and the political-budgetary climate in France. INSEE also shed light on pensioners' consumption habits: their income significantly rose in 2024, but their expenditure didn't follow suit.
Four out of Ten Households Areatin' for a Rainy Day
Approximately 40% of households reported setting aside some funds, whereas 70% admitted to restricting their spending, resulting in a boost in their savings. After quizzing 2,000 savers, INSEE suggested that this cautious approach was to prepare for leaner times. More than one-third of these folks actively reduced their spending to make ends meet. INSEE further clarified that one in five French people save to buy a house, and one in ten to pass on a legacy or lend a helping hand to their kin.
Pensioners: The Cautious Generation
In the case of pensioners, INSEE indicated that two-thirds of the jump in the savings rate in 2024 could be attributed to their wariness. By scrutinizing the banking data of La Banque Postale's clients, INSEE found that the elderlies witnessed a considerable increase in their income, mainly due to pension revaluations. Despite this boost, pensioners' spending didn't react, causing a substantial jump in their savings, particularly among the more modestly endowed.
In a nutshell, the substantial increase in the savings rate among French households in early 2025 was fueled by an uptick in disposable income (largely from pension hikes), prudent consumption amid moderate inflation, and increased taxes, with pensioners' enhanced saving behavior playing a significant role in this upward trend.
With the surge in disposable income, particularly from pension hikes, pensioners are choosing to focus on personal-finance and saving, contributing to a record high retirement savings rate in France. As a result, approximately 40% of French households are actively setting aside funds for future financial needs, demonstrating a commitment to their retirement and overall financial security.
