Whether you’ve settled for a neo-Bohemian life on the rive gauche or a rustic retreat amid the lavender fields of Provence, you’re going to have to pay for it all somehow. So here we reluctantly look at the prosaic details of managing your money in France and how to make it go further.
Opening a bank account
France has plenty of high street banks to choose from including Crédit Agricole, BNP Paribas, Société Générale, Caisse d‘Epargne, Banque Populaire, Crédit Mutuel and the French post office, La Banque Postale. Internet-only banks such as Axa Banque, BRED, Monobanq, Orange Bank and ING Direct have also sprung up.
Although many current accounts (compte courant or compte à vue or compte de dépôt) are ostensibly free, they may come with conditions such as minimum monthly deposits. Banking products in France are littered with fees so always check the detail: you may be charged admin fees, for SMS messages, for paper statements or even for having a debit card. Banks will often try to sell you complicated premium product bundles – check if you really need everything that’s in them.
Choose a bank which has plenty of ATMs in your area as you’ll be charged for taking money from other banks’ machines.
Although you can theoretically open a French bank account without being a resident of France, it’s much easier if you are. You can apply in person or online and will typically need to submit proof of identity and address and possibly confirmation of your income. Generally, all this needs to be done in French and the bank may insist that any English-language documentation you provide is notarised. If the thought of all this you with dread, Britline provides an English-speaking French Banking service to people living in France. You can apply online in English. HSBC also allows you to open an international account online.
Insurance
In France there are more legal insurance obligations on citizens than we’re used to the UK. Three of the most notable differences are:
- Third party civic liability (responsabilité civile propriétaire): You must have third party insurance to cover you against accidents to visitors to your property. This is usually covered as a matter of course in your house insurance. When buying a property, the notaire will want to see evidence of this insurance before the deal can be completed
- School insurance (assurance scolaire): School children must be insured for school trips, sporting and extracurricular activities
- Health insurance top-up (mutuelle): Other than for chronic or acute medical conditions, the French healthcare system will generally only reimburse you for 70% of the cost of any medical treatment. You need to cover the difference with additional private health insurance cover
Taxes
Income tax (impôt sur le revenu)
France is about to introduce a PAYE scheme for the first time which will come into force on 1 January 2019. The current system of household annual tax returns (déclaration de revenus) involves taxes being paid a year in arrears.
The income tax rates in France in 2018 (for income earned in 2017) are:
| Gross Annual Salary | Tax Rate |
|---|---|
| Up to €9,807 | 0% |
| €9,807–€27,086 | 14% |
| €27,086–€72,617 | 30% |
| €72,617–€153,783 | 41% |
| €153,783+ | 45% |
Social security contributions (charges sociales/cotisations sociales)
Social security contributions in France are some of the highest in the world – up to 28% – and also the most complicated, with different charges for different benefits
Property tax
There are two main property taxes
- French property tax (taxe foncière) is an ownership tax which goes towards the funding of local services
- Occupier’s tax (taxe d’habitation) is an annual tax whose amount is broadly based on the rental value of your property. This tax is in the process of being phased out
VAT
The standard rate of VAT (taxe sur la valeur ajoutée) in France is 20% with lower rates of 10% (e.g. restaurants), 5.5% (e.g. energy, books, sporting events) and 2.1% (e.g. certain medicines).
Tipping
France does not have much of a tipping culture
- Cafes and restaurants: a 15% gratuity is already included your bill. There is no requirement or expectation for you to give more but you can leave a few coins if you like. Often just round up
- Bars: no need to tip for drinks
- Taxi drivers: between 5% and 10% depending on how helpful they are
- Hotels
- Porter: €1-€2 per bag
- Room service waiter: €1
- Housekeeping: €1 per day
- Coat check: €1 per item
- Hairdressers: No tip expected
Cash, card or cheque?
The fact that France’s most common tax-free savings account, the Livret A, was established in 1818 by King Louis XVIII to pay back debts incurred during the Napoleonic Wars may give you a hint as to the speed of change in the French finance sector. Cheques are still a popular method of payment here. Always carry cash on you. Most – but not all – businesses accept credit cards (carte de crédit) and debit cards (carte de débit) but for many people cash is still the preferred way of paying for things. However, more stringent anti-money laundering laws mean it’s no longer legal to hand over more than €1,000 in cash.
Pensions
If you want to, you can draw your UK pension in France. Contact the UK Government’s International Pension Centre to find out how. For more information about pensions, see our guide to Retiring to France.
Moving your money
When you need to transfer money from the UK to France or vice versa, bear in mind that doing it through your bank is an expensive way of doing it. Not only will they charge you a fee, they may also fleece you through the currency exchange rate they apply. If you’re moving small amounts of money, the fee will be disproportionately large. If you’re moving your savings or the capital to buy a house, the unfavourable exchange rate will hit you hard.
By far the cheapest way to move money across borders is to use a service such as WorldFirst’s currency exchange service which is simple and transparent. Just three steps:
- Make an international transfer: Tell us how much you want to send (over £1,000), who you want to pay and which currency you want to pay in. Then we’ll quote you a rate and you can book the trade
- Send us your money: Once you’ve booked your rate you’ll receive a trade confirmation containing all the payment information so you can pay World First by debit card or bank transfer
- We make your payment: That’s it. Put your feet up. World First will convert your funds and send the money to the account you requested, all at a great rate
Money-saving tips and tricks in France
- Shop in the local outdoor markets. You’ll find produce and much else far cheaper than in the supermarkets
- In restaurants, look out for the plat du jour (daily special) as it’s cheaper and often fresher
- Buy your wine direct. Seek out your local wine producers and pay them a visit
- French motorways may be faster and less congested than you’re used to in the UK, but the tolls quickly mount up if you use them habitually. Explore alternative routes in your region so you can judge whether the tolls are really worth it for your most frequent journeys