Happy New Year!! I wish you all the very best for 2026. I hope that you had an enjoyable festive season. We spent Christmas at home, which was very nice and relaxing, so now I am well rested, ready for the new year and looking forward to seeing all my clients.
Financial update January 2026 – France
By Katriona Murray-Platon
This article is published on: 7th January 2026
On 9th December the Law for the Financing of the Social Security was adopted by the National Assembly and, pending any issues with the Constitutional Court, it is now enacted into law. Under this law, the official retirement age is now 62 years and 9 months, with a required contribution of at least 170 semesters set until 1st January 2028 for pensions taking effect from 1st September 2026. As a result, anyone born between 1964 and 1968 may retire 3 months earlier than previously expected. Furthermore, as from 1st January 2026, the French state pension increased by 0.9%.
This law also increased the CSG social charges on interest, dividends and capital gains from 9.2% to 10.6%. The flat tax (PFU) on this income has therefore risen from 30% to 31.4%. However, withdrawals from assurance vie policies, PEL and PEP (plan épargne populaires) accounts, rental income and capital gains on property are not affected. So for people with money in UK saving accounts, the interest will now be taxed more heavily in France. It is worth considering whether it remains appropriate to keep such accounts, or whether it would be more tax-efficient to move funds into French savings vehicles such as a Livret A or LDDS, or into an assurance vie for longer-term planning.
If you have up to €61,200 that you need to put away for a year or two, a PEL account opened from 1st January 2026 now offers an interest rate of 2% compared with 1.75% for PELs opened after 1st January 2025. The interest rate for a PEL is determined at the time the account is opened.
From 1st January 2026, cash gifts now need to be declared online via your account on the impots.gouv.fr website. This applies to gifts of money, shares or valuable items such as a car. You will be asked to declare any money or gifts of value and state whether they fall under the €100,000 allowance between parents and children or the €31,865 made by a relative under 80 years old to a recipient who is over 18 years old. If the recipient is a minor, their parents should do the declaration for them on their online account. Christmas gifts remain exempt and do not need to be declared.
Since 1st December 2025, parents who are divorced or separated, will now both receive childcare benefit (complement de libre choix de garde) provided the child is cared for by a registered childminder either at the childminder’s home or at the child’s home.
For those looking for a bargain or waiting to buy something special, the sales in France will begin on Wednesday 7th January at 8am and will continue until Tuesday 3rd February.
If you are considering choosing an electric vehicle for your next car, the good news is that government incentives will continue in 2026.
Low-income households may receive a bonus of €5,700, middle-income households €4,700, and all other buyers €3,500, when purchasing a brand-new electric car.
An additional bonus of between €1200 and €2000 may also be granted if the battery of the car was manufactured in Europe.
Furthermore the thresholds for what is considered a low income and middle income households have been increased.
Later this month, I will be attending our annual conference in Monaco with colleagues and meeting with our product providers to review the past year and discuss the factors likely to influence investment strategies in 2026. I will share key insights from our conference in the next Ezine.
In the meantime, if you have any questions about the topics above or would like to discuss your personal financial situation, please do not hesitate to get in touch to arrange a free phone call or meeting.