Record Year for French Insurance-Based Retirement Savings Plans: What’s Driving the Surge?
Insurance-based retirement savings plans (PERs) in France experienced a record year for inflows in 2025, attracting nearly 8 million subscribers. This fiscally advantageous savings vehicle continues to solidify its position as a preferred tool for retirement planning.
Contributions to insurance-based PERs – which function similarly to life insurance contracts, differing from bank-based PERs linked to investment accounts – increased by 16% last year, reaching €20.2 billion. December saw a particularly strong surge with €3.1 billion in contributions, driven by the ability to deduct voluntary payments from taxable income before the year-finish deadline.
Tax Advantages Tailored to Your Professional Status
The tax benefits of a PER vary significantly based on your employment status. Salaried employees and civil servants can deduct contributions up to 10% of their professional income, capped at eight times the annual Social Security ceiling (PASS) of the preceding year. This allows for potential annual deductions exceeding €30,000.
Self-employed individuals (TNS) benefit from an even more generous scheme. Their deduction ceiling is 10% of taxable profits, limited to eight times the PASS for the year of the contribution, plus 15% of profits between one and eight PASS. This can result in deductions exceeding €80,000 annually for artisans, merchants, business owners, and liberal professionals.
Changes to Late Contributions
The 2026 finance law, finalized on February 2nd, introduces a change regarding later contributions. Contributions made after the age of 70 will no longer be eligible for tax deductions. However, this change has limited impact, as those inactive (students, job seekers, stay-at-home parents) or retired can currently only deduct 10% of the previous year’s PASS, equating to just over €4,000 annually.
A Symbolic Milestone Reached
The total value of insurance-based PERs, encompassing contributions, annual interest, and latent capital gains, surpassed €100 billion, reaching €111.9 billion as of December 31, 2025. This represents a 20.5% increase compared to the €92.8 billion recorded at the end of 2024.
The growth in subscribers is also notable. The number of insurance-based PER holders rose from 6.9 million to 7.9 million in one year, adding one million latest members. As of June 30, 2025, 12.4 million French individuals held a PER of any type, with a total value of €136.1 billion. Insurance-based PERs accounted for three-quarters of the total provisions, with bank-based PERs making up the remaining quarter.
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Future Trends and Considerations
The continued growth of PERs suggests a growing awareness among French citizens of the importance of proactive retirement planning. The tax incentives clearly play a significant role, but the increasing flexibility and range of investment options within these plans are also contributing factors.
Looking ahead, several trends could shape the future of PERs in France. Further regulatory changes, particularly concerning withdrawal options and portability between different types of PERs (insurance-based vs. Bank-based), are likely. The integration of Environmental, Social, and Governance (ESG) factors into investment strategies within PERs is also expected to gain momentum, reflecting a broader societal shift towards sustainable investing.
The impact of demographic changes, such as an aging population and evolving workforce patterns, will also be crucial. PERs will demand to adapt to cater to the needs of a more diverse range of savers, including those with non-traditional employment histories and those seeking more personalized retirement solutions.
FAQ
Q: What is the maximum amount I can deduct from my taxes with a PER?
A: It depends on your employment status. Salaried employees can deduct up to 10% of their income, capped at eight times the PASS. Self-employed individuals have a higher limit.
Q: Can I withdraw funds from my PER before retirement?
A: Withdrawals are generally restricted before retirement age, but exceptions exist for specific hardship situations.
Q: What is the difference between an insurance-based PER and a bank-based PER?
A: Insurance-based PERs function like life insurance contracts, while bank-based PERs are linked to investment accounts.
Q: Will the tax benefits of PERs change in the future?
A: Regulatory changes are possible, as demonstrated by the recent changes regarding contributions after age 70.
Did you know? December is consistently the most popular month for PER contributions due to the tax deduction benefits.
Pro Tip: Carefully consider your investment horizon and risk tolerance when choosing a PER, as different plans offer varying levels of risk and potential returns.
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