Buying property and moving to France
Moving to live in France is always an exciting prospect, and no one expects it to be entirely smooth sailing. We know, as we pack our belongings and wave goodbye to the old and familiar lifestyle in Britain that there will be challenges ahead, and that nothing will be quite the same again. The differences in the language (Learning French), the food (Buying and cooking French food), the weather (Weather in France) and even the complexities of the house buying process have been considered, and we are ready. We may have even decided what French bank to use to manage the money that will finance our new lives (Banking in France).
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Financial planning in France – what to do with your savings
Money, after all, is important. It may not be the fount of all happiness, but even the greatest of the romantics among us has to face up to the fact that a life without money is a pretty miserable one. There is more to managing your money in France, however, than simply opening a bank account. Many ex-pats have savings, and some fortunate souls may even have considerable amounts of savings, so what is the best way to deal with these?
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UK savings and investment schemes also available in France
Unless you are very young indeed you will probably be aware of, and may have held, some of the best known savings schemes in the UK. ISAs and PEPs have been immensely popular in Britain, and have worked well, in the main, for those who have held them. They are easy to manage and relatively easy to understand, so it is unsurprising that many people want to hold on to the familiar when they move to France. This is indeed possible, and there is no legal requirement to relinquish these investments (although you can't add to them) when you become, officially, an "Ex-Pat"!
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ISAs and PEPs are not the best options for your savings and investments in France
However, safe and familiar though they may seem, ISAs and PEPs are not the most tax efficient investments for Brits in France. For one thing, they are no longer tax free. When you fill in your tax return you will need to declare these and pay the dues. Best advice? Sell up. Find something that works harder for you in France. (Tax in France.)
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Savings and investment opportunities in France
There is a wide selection of investment opportunities available to you in France. Some of these are age dependant, but there is a good choice of savings accounts for everyone, from young children through to pensioners. Many are simple and straight forward, and can be arranged through your bank, although some, such as the assurance vie, should be talked through with an independent financial advisor, in order for you to understand fully the benefits of this type of investment, and to enable you to make the most of your money. The following is (and I make my excuses now for the lack of literary padding, but I believe that this is the clearest way to present this information) a list of the most useful savings schemes offered in France:
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Livret Premiere Epargne
This saving or investment option is one for the kids. You can't start too young, however, if you want to be a millionaire when you grow up. Suitable for ages 0 to 11, it offers good rates, easy access, and has a minimum investment of €15 and a maximum of €1,600.
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Livret Jeune Parcours
This is similar to the above saving or investment account, but is for older kids, aged 12 to 25... if , at 25, they are still, in any shape or form, kids!
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Livret A
This one is only offered by the state banks, la Poste and Caisse d'Epargne. It's a limited access saving or investment account that is free of all tax and social charges on gains.
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CESL (Compte Epargne sur Livret)
This one is like the above but is a saving or investment account for pensioners.
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CAT (Compte a Terme)
This offers fixed savings accounts for anyone. It is usual for there to be a minimum investment of over €500 for between one month and five years. It is also available with three month roll-overs with interest increasing every time you renew.
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CODEVI (Compte pour le development imdustrie)
A.k.a. Code 6. It operates in much the same way as a LIVRET A, with no tax or social charges on your savings or investments, but the balance is limited to €6,000 per person.
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LEP (Livret d'Epargne Populaire)
Anyone who pays less than €709 tax per year can have one of these savings or investment accounts, and it is again exempt from tax and social charges.
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CEL (Compte Epargne Logement)
If you want an easy access account for your savings that earns you a beneficial loan rate on up to €23,000, this is the one for you.
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PEL (Plan d'Epargne Logement)
As the above, but designed for fixed term saving.
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PEA (Plan d'Epargne en Actions)
This is a savings plan which is invested in shares issued by EEA corporation tax paying entities. These investments offer tax exemption from dividends and gains if held for more than five years.
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Assurance Vie - one of the best saving or investment options in France
I mentioned this one earlier. Described as the King of Investments, the benefits of this are manifold, but you are advised to see an Independent Financial Advisor to make the most of the possibilities offered. Further information on an assurance vie is given in our article on Sarkozy's changes and financial implications thereof (Sarkozy and French property owners).
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Savings and investment advice
Rob Hesketh, of Spectrum IFA Group, also warns against investing blindly in any scheme offered up on the internet, or by credit immobiliers, some of whom will happily take your money but may not offer very much in return. Some, of course, are perfectly reputable and can offer good service, but be sure that you know the difference. Word of mouth is usually a good recommendation, as you can't beat personal experience for weeding out the good from the also rans. In Rob's words; "The more money you have to invest, the more careful you should be about it and the more advice you should seek."
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Changes afoot in France - keep an eye on your savings and investments
Wise words. Heed them, and all should be well! It is important to note that this is a time of huge change for France, as Sarkozy begins to put his much vaunted reforms into action. Good financial advice is probably more important than ever to enable you to keep abreast of the changes and to make sense of what they may mean for you.
Additional articles which may be of interest:
Health care in France
Getting your UK pension paid in France
Life in France
Jobs in France
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About the author
Joanna Simm moved to the Languedoc area of south-west France in October 2004 having found her property through French Property Links. (This article has been written with advice from Rob Hesketh, Spectrum IFA Group.)
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