French savers turn to private pensions as faith in creaking welfare system wanes

Florent Fournon grew so tired of waiting for politicians to overhaul a ‌public ​pension system that nearly three-quarters of French people have lost faith in that he now puts €500 a month into an investment account for his retirement.

As the pensions debate continues to clog the arteries of French political life — straining public finances and deepening partisan dividesahead of a momentous presidential election — private pension schemes are booming. Their success reflects mounting doubts over whether the current pay-as-you-go system, a cherished achievement ‌of France's postwar social settlement, can survive the challenges of an ageing population and a shrinking birth rate. Younger French workers are particularly sceptical.

"I have a fairly deep conviction that the current system won't hold," said Fournon, a 30-year-old media sales professional from Paris' suburbs. "If I'm entitled to a pay-as-you-go pension, I see it as a bonus. I don't count on it as a base." The shift in public opinion is helping to erode a longstanding taboo over the sanctity of the current system, with the change most clearly reflected in the economic proposals of candidates ‌running in the April 18-May 2 presidential election.

Many of them now back some form of private savings, albeit mostly through voluntary contributions, to complement the public system. 'FEAR OF THE FUTURE'

While other nations have similar pay-as-you-go pension systems, few rely on them quite ‌so exclusively as the French. Workers are not required to save for retirement, and most people use the public scheme as their primary source of later-life income. The average French pension was €1,700 ($1,910) per month in 2024, the last year for which the government has data.

France's household savings rate, at 17% of disposable income, is among Europe's highest. But much of that money sits in low-yielding bank accounts or fixed-income vehicles. If French households had invested around a quarter of their savings in equities over 20 years, they would be collectively €340 billion richer, according to think tank Rexecode. Meanwhile, with current workers funding today's retirees, France's retirement arithmetic is deteriorating. France had more than four ⁠workers per retiree ​in 1990. The ratio has fallen to about 2.5 and is projected ⁠to drop below 2 by mid-century, according to the national pensions advisory council.

A 2020 law created the plan d'épargne retraite (PER), a voluntary retirement product that lets savers deduct contributions from taxable income. Nearly 13 million people have signed up for one since then. Total assets in this class topped €150 billion in 2025, up ⁠46% over the previous two years, according to the finance ministry. They have grown more attractive as faith in the long-term viability of public pensions has fallen.

A June IFOP survey found 72% of French people believe the current system will not guarantee an adequate pension, rising to 83% among 25-34 year-olds. An ​October 1 Odoxa poll found 77% prefer a system funded at least partly by personal savings, against 23% for pay-as-you-go. In 2024, 60% preferred the current system and 38% a savings-backed one.

"There's a fairly general message at the moment: France ⁠is going deeper into debt, pensions can't rise much, and yet the number of retirees will grow," said Vincent Messiac, 42, a sales and marketing manager who began making voluntary contributions three years ago. "It's a rational decision, born of a fear of the future." PENSIONS DEBATE ROILS FRANCE

Pensions have long been a convulsive issue in French politics. President Emmanuel Macron ⁠braved ​weeks of protests in 2023 to raise the retirement age from 62 to 64, only to be forced to suspend the flagship reform two years later to pass the 2026 budget.

While many parties from the far right to hard left still oppose raising the retirement age, presidential contenders from the centre and centre-right, and some Socialists, are open to some form of private pension even though it will take decades before investment returns are big enough to ease pressure on the public system. Still, most candidates, except centre-right former Prime Minister ⁠Edouard Philippe, shy away from compulsory savings, fearing workers and employers would balk at extra contributions on top of what they already pay.

Far-right frontrunner Marine Le Pen will present her private pension plans in the coming weeks, but has previously said it would ⁠be a voluntary scheme. Anti-capitalist firebrand Jean-Luc Mélenchon, who polls suggest will join ⁠Le Pen in a runoff, says private pensions only widen inequality and create a lottery in old age.

YOUNG LOSE FAITH Charles-Henri Colombier, a Rexecode economist, said falling births reinforce the sense that the current model is unsustainable, while online financial influencers have encouraged some people to take matters into their own hands.

Alex Volpi, 33, a Paris-based sales employee at a large tech company, pays into a ‌PER after watching his parents, who are nearing ‌retirement, worry about how much they will receive. "I don't want that kind of uncertainty," he said.

($1 = 0.8894 euros)