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By Katriona Murray-Platon
This article is published on: 4th March 2026
After a very wet, windy and stormy February it is lovely see some sunshine and the first spring flowers coming into bloom.
The income tax thresholds have not been frozen as initially planned in the 2026 finance bill; instead, they have increased by 0.9%, aligning with the 2025 rate of inflation. The new tax-free allowance is €11,600 per person. The other tax bands are as follows:
| INCOME | RATE |
| Up to €11,600 | 0% |
| From €11,601 to €29,579 | 11% |
| From €29,580 to €84,577 | 30% |
| From €84,578 to €181,917 | 41% |
| Over €181,917 | 45% |
Employees can deduct a set amount of €509 from their taxable salaries for costs, capped at €14,556. The 10% abatement before tax will still apply to pensions with a minimum of €454 and a maximum of €4439.
To reduce your taxes and assist you at home you may use home help such as a gardener or cleaner. Now the cost of home delivered meals to the handicapped or elderly and their dependents also qualifies for a tax credit even if you don’t have other kinds of home help. While services may be more limited in rural areas, it’s worth exploring.
Another measure that has been scrapped is the increased VAT threshold for independent workers and furnished rentals. This threshold remains unchanged.
As mentioned in last month’s Ezine, social charges have risen from 17.2% to 18.6%. Whilst this does not apply to assurance vies nor PEL accounts, it will apply to PER retirement accounts. Also, after the recent fall in interest rates on the Livret A and LDDS accounts on 1st February, the interest rate on the LEP account has also dropped from 2.7% to 2.5%.
Assurance Vies remain the most popular investment products in France with €2,107 billion currently invested, compared with only €449 billion in Livret A and €136 billion in retirement accounts. According to INSEE, investments in Assurance Vies have increased over the years with €121 billion invested in 2005, €135 billion in 2015 and €192 billion in 2025. Whilst Euro Funds (the money that that French government and businesses borrow from the insurance companies) remain the preferred asset class, this figure has decreased from 79% to 61% in 2025 with the remaining 39% in equities. Although the average rate of Euro Funds was 2.7% in 2025, it has rarely outpaced inflation over the past 8 years. Our assurance vies offer a more diversified, cross-border approach, making them more suitable for English speaking expats.
On 25th February 2026 the Prudential Assurance Company board reviewed the Prufund Expected Growth Rates (EGR) as part of its quarterly review. Prufund aims to help customers grow their investments over the medium to long term (5 to 10 years) while protecting them from short-term market fluctuations through the unique smoothing process. The Expected Growth Rate (EGR) is the forward-looking element of the unique Prufund smoothing mechanism. This quarter the EGRs for all versions of Prufund remain unchanged.
However, there have been some upward movements to the, the Unit Price Adjustment (UPA), the backward-looking element of the Prufund smoothing process, which is formulaic and non-discretionary, as follows:
Prufund Growth GBP +2.54%
Prufund Growth Euro + 3.25%
Prufund Growth USD + 3.46%
This is positive news for Prudential International investors when they receive their quarterly statements at the end of the month.
At the time of writing, the US and Israel have launched strikes against Iran, which will have an impact on oil prices and may cause some short-term market volatility. However, our well diversified portfolios are designed to withstand periods of geopolitical tensions. In times of intense media coverage, it’s important to remain calm and focus on long-term strategies.
