After a long sunny summer it is nice to get properly back to work now that my children have returned to school. It is also nice to have had some days of rain since the garden was in desperate need of it.
Financial update in France – September 2025
By Katriona Murray-Platon
This article is published on: 4th September 2025
Over the summer you should have been notified that your tax statements are available online. If you paid too much tax this was reimbursed on 25th July. If you are not paying your tax by direct debit from your account, you must pay your tax by 20th September. If you have provided your bank details to the tax office and you have more tax to pay, your monthly payments will increase from 15th September and, if you have more than €300 to pay, you will have to pay off this amount over the next four months on 25th September, 25th October, 25th November and 29th December. If you have less than €300 to pay, it will be taken out in one payment on 25th September. Please do check your tax return as mistakes often occur.
Most people don’t notice the mistake until they are asked to pay an unusually high amount of tax and then they realise that other mistakes were made in previous years. If you do notice something wrong, you must first pay the tax that is requested on the statement and then submit an amended return. Any tax overpaid will be repaid once the new statement is produced.
As announced in my previous Ezine, the interest rates for the Livret A and LDDS savings accounts fell from 2.4% to 1.7%, the LEP interest rate fell from 3.5% to 2.7% and the interest rate for the CEL account fell from 1.5% to 1.25% as from 1st August 2025.
The markets continued to perform well in July and August, with US equities hitting record highs. This was in part due to concerns over tariffs diminishing, as numerous trade deals were signed leading up to the Trump administration’s 1st August deadline. Although the Trump administration considered these deals frameworks, including deals with Japan, the European Union (EU) and South Korea, as a political victory, they were vague on details and lacked clarity. However the markets appear to be less reactive over such tariffs, at least for the moment, which may indicate that volatility will not be as severe as it was in April. Strong corporate earnings and solid jobs data also buoyed equities.
UK inflation accelerated to 3.8% in July, the highest level since January 2024, while Eurozone inflation held steady at just 2%. This marks the widest gap between the UK and its European peers in nearly two years. Meanwhile the US dollar rose 3.2% in July, its best month since 2022, as the Fed indicated it was still in no rush to cut rates. With inflation above the Fed’s 2% target, and the full impact of tariffs on inflation unknown, the Fed seems to be taking a ‘wait and see’ approach.
For those with Pru assurance vies or those thinking of investing in a Pru Assurance Vie there is good news as, on Tuesday 26th August 2025, the Prudential Assurance Company (PAC) board reviewed the Prufund Expected Growth Rates (EGR) as part of the quarterly review process.
The Prufund aims to help customers grow money over the medium to long term ( 5 to 10 years) and protect customers from some of the short-term ups and downs of the markets by using the unique established smoothing process.
The Expected Growth Rate (EGR) is the forward looking element of the Prufund smoothing process. Pru announced that the EGRs for the GBP versions of Prufund were increased by 0.1%. So the Prufund Growth GBP is now 7.4% and the Prufund Cautious GBP is now 6.7%. The EGRs for all the Euro and USD versions of the Prufund remain unchanged. The Unit Price Adjustment (UPA) part of the smoothing process, which is a backward looking element, and which is formulaic and non-discretionary, is also reviewed quarterly. This quarter there was an upward UPA for the Prufund Growth USD version of 3.55%. There were no Unit Price Adjustments in the other PruFunds.
Going into the Autumn with varying inflation levels across key economies, continuing uncertainty with tariffs and ongoing geopolitical concerns in the Middle East and Europe, all which impact market performance, it is as ever important to maintain a well-diversified long-term investment approach, rather than reacting to short-term market swings.
With careful planning, and appropriate advice and reassurance, our clients can navigate through periods of volatility and uncertainty.
If you have any questions on the above or any other matters, please do get in touch to arrange a time to discuss your personal financial situation.