French families are starting 2026 with a wave of financial changes that could tighten monthly budgets. While some updates are already confirmed by law, others hinge on final votes — but all point toward reduced disposable income throughout the year.
Insurance and Energy Costs Set to Rise
The first increase affects non-optional household bills like insurance and energy. Car insurance premiums are expected to jump by 4–5%, while home insurance may rise by 4–6%. Health coverage isn’t spared either — complémentaire santé (top-up health insurance) could see an average rise of 4.3% for individual plans and 4.7% for employer-backed schemes.
Additionally, a 2.05% levy on mutual insurance contributions is expected to bring in €1 billion. Although insurers can’t pass this on directly, the cost may still be reflected in renewed premiums.
Energy Prices and Fuel Duties Deliver More Impact
Energy bills will rise as suppliers face a 27% increase in obligations to fund environmental efficiency programmes like MaPrimeRénov’. According to UFC-Que Choisir, this could add about €50 per year to an average electricity and gas bill.
Meanwhile, drivers will see an estimated increase of 4 to 6 cents per litre in fuel prices due to higher taxes and regulations, potentially costing commuters an extra €60–€100 annually.
Uncertainty Around 2026 Income Tax Bands
France usually adjusts its income tax brackets to match inflation, preventing bracket creep from small pay rises. However, for 2026, the government initially proposed a freeze to save €2 billion. While lawmakers rejected this for now, the final budget remains undecided. If the freeze passes, more households may be pushed into higher tax brackets despite no real income growth.
Pensions Increase Slightly but Tax Relief Shrinks
State pensions and minimum social benefits will rise by 0.9% starting 1 January 2026. A more drastic freeze was scrapped. But a significant change comes in tax deductions: the current 10% tax allowance (up to €4,399) on pension income will be replaced by a fixed deduction of €2,000 per retiree.
For couples earning over €40,000 in pensions, the new system means a smaller tax relief and potentially a higher tax bill, especially with rising health and insurance expenses.
Higher Taxes on Savings and Investment Income
The CSG (contribution sociale généralisée) on investment income increases from 9.2% to 10.6%, raising the flat tax on gains (PFU) from 30% to 31.4%. This applies to:
- Term deposit accounts
- Brokerage accounts (comptes-titres)
- Equity savings plans (PEA)
- Retirement savings plans
- Employee savings schemes
For example, a €1,000 gain would now incur €314 in tax instead of €300. PEA accounts held under five years are hit hardest. Even after five years, social charges still apply on profits.
Changes to Housing Savings Plans (PEL)
From March 2026, any PEL opened after March 2011 will automatically close after 15 years. If the account holder takes no action, the funds will be moved to a lower-yield standard savings account. Plans opened before the cut-off date retain previous conditions.
On a positive note, new PELs from 1 January 2026 will offer a slightly better interest rate of 2%, up from 1.75%.
New Online Shopping Charges from July 2026
Starting 1 July 2026, a new €3 tax will apply to non-EU parcels under €150. It mainly affects low-cost goods like fashion and gadgets. The tax applies once per package unless it contains mixed products, in which case it may apply to each item.
An additional proposed levy of €2–€5 per parcel is also under review. Together, these charges could make imported online items 30%–80% more expensive.
Real-World Impact on a Typical Household
Middle-Income Family Scenario
Imagine a working couple with two children, a mortgage, and a car. In 2026, they face:
- 5% higher premiums for car and home insurance
- 4.5% increase in health insurance
- €50 rise in energy bills
- €60–€100 increase in fuel costs
- Possible tax rise if income tax brackets remain frozen
- Higher taxes on investment gains
Retired Couple Scenario
For retirees earning €42,000 annually in pensions, the 0.9% raise equals €378 per year. But the new fixed allowance of €4,000 per couple replaces a more generous deduction of up to €4,399. With higher CSG on savings and rising living costs, this couple may see reduced real income.
Essential Terms and Smart Household Strategies
- CSG: A social charge funding health and care, applied to income and savings.
- PEA: A long-term equity savings plan with tax advantages after five years.
- PEL: A regulated housing savings account with fixed rates and loan potential.
Households can manage the impact by timing withdrawals from PEA accounts, monitoring their PEL maturity, and adjusting online shopping habits — like grouping purchases or buying from EU-based sellers — to limit new parcel taxes.
Final Takeaway
While none of these changes may seem extreme on their own, their cumulative effect can erode a family’s monthly budget. Keeping track of insurance costs, energy bills, tax shifts and shopping fees is key to protecting your 2026 finances.
