The challenges of intergenerational wealth transfer faced with the emerging demographic shock

The savings environment in 2026

The early months of 2026 continue the trend observed in 2025

In the first two months of the year, financial investments (excluding securities) stood at 7.1 billion euros, up 0.9 billion euros from their level in January/February 2025. Despite being lower than the average level for the same period in 2018–2019 (9.3 billion euros), this slight increase reflects a savings-friendly economic environment and a relative increase in household borrowing capacity.

The choices made between financial products – quite similar to those observed in 2025 – are driven by disinflation, triggering a decline in key interest rates, the consequent drop in regulated rates, and the steepening of the yield curve⁽¹⁾.

Life insurance continues to drive net fund inflows (13.3 billion euros vs. 9.7 billion euros in January/February 2025) and remains the most preferred investment choice in France thanks to its better performance. It is worth noting that the average rate on euro-denominated products, after hitting a historic low of 1.3% in 2021, rose sharply to reach 2.6% in 2025, while the rate on the Livret A passbook savings account was cut to 1.5% on February 1^st, 2026.

The effect of this policy is that passbook savings accounts – and regulated savings accounts in particular – continue to suffer from their lower returns while sight deposits remain at the same positive level as last year (1.1 billion euros). Home savings accounts are seeing a reduction in outflows (−5.5 billion euros after −7.0 billion euros in 2025) before the automatic closure of savings plans opened 15 years ago begin to drive up withdrawals again starting in March 2026.

⁽¹⁾ The steepening of the yield curve refers to the phenomenon characterized by a widening of the spread between short-term and long-term interest rates. This phenomenon occurs in one of two scenarios: when long-term interest rates rise faster than short-term rates, or when short-term rates fall faster than long-term rates.

Impact of the war in Iran

We are already feeling the impact of the war in Iran. As early as March 2026, the French were giving vent to their worries about prices. This concern finds expression in the upward revision of the outlook for price increases despite the fact that half of the responses to the survey we conducted were received before the conflict began (February 28).

It is true that inflation rose to 1.7% in March, up from 0.9% in February. In an environment characterized by greater uncertainty and the expectation that prices will increase, the propensity to save, despite being down slightly, remains at historic levels against a background of high savings capacity. Assuming that the conflict remains short lived, the impact of energy price shocks on economic growth is expected to remain limited. That said, the current crisis is having a three-pronged impact on the French economy:

• Decline in household purchasing power,
• Rise business input⁽²⁾ costs, and a
• Decline in global demand for French goods.

These three impacts are depressing growth through weaker demand for consumer goods & services, investment, and exports (to keep the same order as the factors mentioned above). This stagnating growth combined with higher prices is typically known as ‘stagflation.’ Given the underlying assumption and the French economy’s reduced dependence on fossil fuels, these trends should have a relatively moderate impact in 2026: +0.3 percentage points of inflation (1.9% instead of 1.6%) and a −0.1 percentage point shaved off GDP growth (0.9% instead of 1.0%).

⁽²⁾ Inputs used in the production process, often raw materials.

On the question of interest rates, the European Central Bank (ECB) could opt for a moderate 25-basis-point (bp) hike in its key interest rates by June in response to inflationary risks, with the deposit facility rate⁽³⁾ rising to 2.25%. The 10-year OAT would consequently rise by +15bps, averaging 3.80% for the year. The Livret A rate is expected to be +20bps higher than the rate expected at the end of the year before the outbreak of war, rising from 1.5% on February to 1.8% on August 1^st, 2026. The increase should be the same for the Livret d’Épargne Populaire (LEP), at 2.8%, while the increase for passbook savings accounts in general is expected to be slightly lower.

To measure the impact of the new scenario described above on financial investments, we have used a robust econometric estimate of net inflows around a long‑term trend, which is, on the one hand, positively related to growth in purchasing power (an income resource) and housing credit (a borrowing resource), and, on the other hand, negatively related to the 10‑year OAT yield (a ‘income effect’ from interest‑bearing products that implicitly reduces the willingness to save more).

Starting from a net inflow of 56.6 billion euros in 2026, the new scenario should result in a 7.2 billion euros reduction in the amount of financial investments, primarily due to lower gains in household purchasing power (−5.6 billion euros compared to the previous scenario). The impact of the rise in interest rates should, a priori, be limited (−1.0 billion euros), and the same goes for the reduction in new mortgage loans (−0.6 billion euros).

⁽³⁾ The deposit facility rate is one of the three key interest rates, along with the refinancing rate and the marginal lending rate, set by the ECB and paid to commercial banks when they deposit funds with the ECB overnight.

€49.4 billion Estimated net amount of household financial investments in 2026

Overall, French households’ financial investments are expected to reach a total of 49.4 billion euros for full-year 2026 under this new scenario. This should have a particularly negative impact on sight deposits owing to the sharp decline in purchasing power. The upcoming massive withdrawals from home purchase savings accounts (PEL) are expected to be slightly less advantageous for life insurance owing to the increase in the Livret A interest rate.

However, as in 2025, we should continue to see a shift in financial investments in favor of life insurance, B-CSL passbook savings accounts, and sight deposits at the expense of home purchase savings accounts and term accounts, with regulated savings accounts benefiting from the rise in regulated rates.

The challenges of intergenerational wealth transfer faced with the emerging demographic shock

Macroeconomic challenges

The French population is growing old. There are now as many French people aged 65 or older as there are under the age of 20. Over the past 30 years, the number of senior citizens has nearly doubled while the number of people under the age of 20 has remained stable. This aging trend stems from a decline in birth rates coupled with a drop in mortality rates.

However, the number of deaths has risen sharply over the past 15 years owing to the large baby-boom generations. Over this period, the mortality rate has grown by an average of +1.1% per year (despite being affected at times by exceptional events such as the heat waves in 2003 and 2022, flu outbreaks in 2015 and 2022, or health crises such as COVID in 2020–2021). Over the next 15 years, the latest INSEE projections anticipate an annual increase in deaths of 1.2%.

Multiplied by a factor of 2 In 30 years, the number of senior citizens has nearly doubled in size

In 2025, the net wealth of the French population⁽⁴⁾ will stand at 15,000 billion euros, and that of retirees will account for 41% of this total, or 330,000 euros per retiree. It is growing at a slightly slower annual rate than that of the French population as a whole (+2.6% versus +3.0% over the past 15 years) owing to a less risky portfolio. Gift and inheritance taxes are projected to reach 20.7 billion euros in 2025, including 4.5 billion euros from gifts and 16.2 billion euros from estates. Although the trends for gifts and inheritances were similar during the 1995–2010 period, they diverged significantly during the 2010–2025 period with transfer duties from gifts growing at an average annual rate of 11.1%, compared to 5.8% for those from inheritances.

Over the next fifteen years (2026–2040), the number of deaths is projected to reach 10.7 million, 1.5 million more than in the previous fifteen years (2011–2025) owing to the large baby-boom generations reaching advanced old age.

The net worth (gross wealth minus debt) of the deceased is estimated at 3,832 billion euros. The inheritance flow (which takes account of, and results from, gifts) is projected to reach 6,246 billion euros over 2026–2040, an increase of 1,992 billion euros compared to 2011–2025 (+47%). Finally, inheritance/gift duties are projected to increase by 140 billion euros between these two fifteen-year periods.

⁽⁴⁾ Sources: Bank of France Household Wealth Distribution Accounts, INSEE, BPCE L’Observatoire calculations

French people’s opinion

A survey of a nationally representative sample of 2,000 French people aged 18 and older and 544 high-net-worth individuals (with 100,000 euros or more in financial assets) was conducted online from February 27 to March 8, 2026, constituting the 21^st wave of our Savings & Investments Barometer survey, with a specific focus on intergenerational wealth transfer.

The French and the transfer of wealth: 3 key takeaways

• Even though inheritance is considered a significant tax burden, it is still generally perceived as essential to family protection,
• The priorities of French people passing on their wealth: securing their spouse’s future, reducing inheritance taxes, and preserving family harmony,
• Only 1 out of 5 French people know the amount of inheritance tax that beneficiaries would have to pay.

Inheritance: a tax-heavy pillar for preserving family wealth

Although inheritance is perceived as a significant tax burden, it plays a crucial role in preserving family wealth and securing the future of loved ones, a goal that people consider increasingly important as they grow older.  Inheritance is also seen by 8 out of 10 French people as a source of inter-personal tension within the family, particularly among those aged 50–65. Those with significant assets place greater value on the security aspect (90%). Inheritance is more widely recognized as a driver of social inequality among childless French people (56%).

The French are torn between hedonism and altruism toward their loved ones. French people aged 66 and older, and those possessing significant assets, are two categories more likely to make arrangements to pass on their wealth to their loved ones. On the other hand, the absence of children goes hand-in-hand with a desire to enjoy one’s wealth: 2 out of 3 French people without children prefer to spend or save for themselves.

• Securing their family’s future and reducing inheritance taxes are the top priorities for the French

The success of an estate plan depends above all on its ability to protect the spouse (32%), reduce inheritance taxes (31% ), and preserve family harmony (30%). These last two priorities are reinforced by the presence of children. Married or civil union partners and those over 65 show a stronger interest in protecting their spouse. Reducing inheritance taxes is more important for those with at least one child, and family harmony becomes a greater priority as the family grows larger.

31% of French people consider the reduction of estate taxes a key factor for a successful transfer of assets

The costs involved (49%) and the complexity of the transfer process (42%) are the two main challenges associated with asset transfers. Complexity increases with the size of the estate and the age of the individual. Potential family conflicts arise more frequently in large families (37% compared to 32% for the French population as a whole).

• The French are comfortable discussing inheritance but are relatively ill informed

While discussing the topic of inheritance with one’s spouse (90%) or children (85%) seems straightforward, only 56% of French people know the value of their parents’ estate and 73% that of their spouse, an area where women are even less well informed than men. There consequently exists a lack of understanding regarding inheritance taxes: only 19% of French people know the amount of inheritance taxes their beneficiaries would have to pay. This level of awareness is slightly higher among older adults (27%), families with children (22%), and executives/business owners (30%).

Actions taken by the French

• One out of two French people has received a gift, primarily from their parents

52% of French people report having already received at least one gift and/or inheritance. The primary donors are parents (41%), far ahead of grandparents (11%). The percentage of recipients of gifts or inheritance increases with age, rising from 39% for those under 50 to 74% for those aged 66 and older. Direct transmission to grandchildren is becoming more common. Thus, individuals aged 50 or younger are more likely to report having already inherited from their grandparents (15%) than those aged 66 or older (only 4%).

One out of two French people plans to forgo their parents’ inheritance in favor of their own children. This ‘generational leap’ is more common among households with only one child but less so among divorced French people.

52% of French people report having already received at least one gift and/or inheritance

• When it comes to the transfer of wealth, only 1 out of 3 or 4 French people has taken action

Discussing wealth transfer with one’s children (34%) is more common than with one’s parents (28%). Only 27% of French people have already spoken with a professional (notary, banker/advisor, or lawyer), and 25% have already drafted their will or begun transferring part of their wealth.

Although a generational effect is likely, it varies: the tendency to discuss the matter with one’s children shows a marked increase starting at age 50. Planning with a professional and taking concrete steps (drafting a will or beginning the transfer of assets) become more common after age 65.

• 6 out of 10 French people express a need for guidance on estate planning

Nearly one out of two French people (47%) express a need for guidance on how the transfer of wealth is taxed, followed by taxation on gifts (39%, particularly among those aged 50–65), drafting a will (39%, particularly among those without children), and life insurance in 4^th place  (34%, particularly among those under the age of 50).

Regardless of age, life insurance stands out as the most popular vehicle for asset transfer (31%), far ahead of other mechanisms such as shared gifting/disposal of property (22%) or family gifts (11%).