The introduction of the Plan d'épargne avenir climat(PEAC), announced in April 2023, arrives this Monday, July 1, 2024, according to decrees published in the Journal Officiel. This savings product, reserved for young people under the age of 21, aims to finance low-carbon projects as part of the Green Industry Act. Who is it designed for? We take a look at the advantages and disadvantages.
The Plan d'épargne avenir climat (PE AC) is a new savings product introduced by the French Green Industry Act of October 24, 2023. Aimed at young people under the age of 21, it can be opened by parents for their children from birth, or by the children themselves between the ages of 18 and 21. The savings deposited, limited to 22,950 euros like the Livret A, are frozen until the holder reaches the age of majority. If no withdrawals are made, the PEAC will be automatically closed on December 31 of the year in which the holder turns 30.
The aim of the PEAC is to mobilize young people's savings to finance the ecological transition. The funds will be invested in companies with the SRI (Socially Responsible Investment) label, the France finance vertelabel orthat meet the requirements of the "Paris Agreement" benchmarks.
The PEAC 's yield is expected to be more attractive than that of the Livret A, currently 3%. Unlike the Livret A, the PEAC's remuneration will not be set by the public authorities, but will depend on the performance of the financial markets and the companies listed. According to the impact study for the Green Industry Act, an average annual return of 5% is envisaged, in line with the average performance of a diversified equity investment over 15-20 years.
The PEAC aims to offer investors limited risk. Investments will be restricted to financial instruments with a low level of risk, i.e. a synthetic risk indicator less than or equal to 2 on a scale of 7. The PEAC will benefit from horizon-driven management, progressively reducing the proportion of risky assets as the liquidation date approaches. The aim is to ensure that the investor recovers his initial investment at the time of release.
For those who prefer unrestricted management, detailed information on each referenced asset is provided, including the synthetic risk indicator.
The sums deposited in a PEAC are blocked until the holder reaches the age of majority, with exceptions for disability or death of a parent. After the age of 18, withdrawals can be made provided the contract is over 5 years old, with no possibility of new payments after a withdrawal, and the PEAC will be closed at the holder's 30th birthday.
The PEAC is tax-advantaged, similar to the Livret A or the Livret d'épargne populaire (LEP). Interest generated is exempt from income tax and social security contributions (17.2%) when released or partially redeemed.
The PEAC can be taken out with banks, insurance companies, mutual insurers, provident institutions and their financial intermediaries. Fees will be transparent and regulated, particularly for transfers between institutions.
The Plan d'épargne avenir climat represents an investment opportunity for young people, promoting the ecological transition while offering an attractive return and limited risk. Scheduled for introduction on July 1, 2024, it offers a new option for responsible, high-performance savings.
