Because the Court of Auditors has ELPs in its sights

The Housing Savings Plan is a regulated savings account which, although considered obsolete, represents a boon for those who opened it before 2011. In a recent report, the Court of Auditors investigated the matter.

They weigh heavily on the banks trying to shut them down, they caused problems at the Banque de France during the health crisis, but the old ELPs are still there.

The old ELPs, described as “a real income in particular for the benefit of elderly cardholders “

The Housing Savings Plan is a regulated investment originally intended for the purchase of housing. Over time it has become a classic savings product, because the rates charged for this product depend on the date of opening the account, but before 2011 its particularly advantageous rates make it a privileged investment.

A point that the Court of Auditors did not fail to raise in its latest report on regulated savings.

“Fewer and fewer released due to the downward trend in interest rates, the ELP is diverted from the historical goal of home ownership to become a long-term savings product […] For families this is a financial investment comparable, for the old ELPs, to a real income, in particular for the benefit of elderly owners with high incomes ” notes the Court of Auditors, specifying that ” 37% of the assets are held by people over 65. 34% of the outstanding amounts correspond to plans above the ceiling of 61,200 euros, 22% to plans between 40,000 and 61,200 euros ”.

ELPs that weigh heavily on the state … and on the banks

A situation that could not last according to the institution according to which “The future of home savings deserves reflection among public authorities, credit institutions and real estate professionals” because “home savings are a heavy burden for the state as well as for the banks”.

In fact, “as far as the State is concerned, the tax expenditure corresponding to the tax exemption of ELPs under the age of twelve was opened before 2018 (i.e. concretely the ELPs opened between 2010 and 2018 remunerated at 2.50% or at 2% for those opened from 2016-2018) is estimated at 400 billion euros without the State obtaining any economic return or directing the resource towards uses of general interest as is the case with regulated booklets “. For banks, the cost of ELPs “is even more significant” because “According to the Banque de France, the average interest rate for non-ELP over two years is 0.78%, while the average rate for two-year ELP is 2.6%. This situation derives from the weight on the total outstanding of the PEL which benefits from interest rates set at the opening level and today lagging significantly behind interest rates ”.

The planned ways to close your PEL to customers

Self ” no satisfactory solution could prevail at this stage to get out of an unsatisfactory situation from an economic point of view “the Court of Auditors refers to the amendment “Unilateral contracts of the same credit institutions involved”, a situation that could result “Significant litigation” or “the establishments
the banks do not seem ready to undertake this path on their own. “Negotiations are therefore proposed with customers for the release of their PEL” in exchange for a fee calculated on the basis of the loss of the advantage for the latter “.

Another hypothesis, “dissuade people from maintaining their PEL by using tax leverage” aim “ELPs still evaded from tax deductions, or ELPs under the age of twelve opened before 2018”.

In the end, “The third way is that of a modification of the regulatory framework of existing contracts”. “In fact, it could be envisaged to give banks the possibility of modifying the terms of the old PEL by agreeing to contribute to strengthening the global economic model of regulated savings and increasing its use towards priority investments. (Ecological and energy transition, etc.) , possibly revising the centralization rules of some segments of regulated savings “ explains the Court of Auditors concluding it whatever the solution adopted, the Court recommends reducing the benefits granted to PEL beneficiaries signed before 2011, due to the excessive cost that this situation imposes on financing the economy as a whole ”.

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