The French pension system explained

The lifestyle, culture, and food in France have long exerted a magnetic pull on working-age expats. Many enjoy the country so much that they choose to retire in France. Of course, there is much to consider if you want to spend your golden years in the republic. From figuring out the logistics of moving to France to deciding where to live in the country. You also need to understand the rules around French pensions. For example, typically you need to work for a set number of years to receive a French state pension. You can, in some cases, also transfer your pension plan from your home country. Key details on this and more are outlined below, with topics including:

The French pension system

The French place a great deal of importance on enjoying life. In fact, they call it the art of French living (l’art de vivre à lafrançaise). And they carry this verve for living throughout life’s stages. If you plan on retiring in France you will be glad to know there are many ways to provide for your golden years. The French pension system has three pillars: the state pension, compulsory supplementary pension, and voluntary private pensions. Workers who want to boost their pension savings can contribute to all three pillars.

France has a large retired population. Nearly 15 million residents are drawing a state pension.

The government plans a major overhaul of the French pension system. Proposals include progressively increasing the retirement age and changing the minimum state pension amount. However, with a general election in 2022, it is unlikely that any changes will come into force until at least 2023.

French state pension

Your social security (sécurité sociale) contributions also pay into a state pension (retraite de base or minimum state pension). These payments are compulsory for all workers.

Keep in mind that retirees must work for at least 42 years to claim a full French state pension (40 years if born before 1952). By 2035, the requirement will rise to 43 years for those born from 1973 onwards. It’s possible to claim a pro-rata French pension if you’ve worked and made social security contributions in France for at least 10 years.

The state pension scheme entitles retirees to draw a maximum of 50% of their annual average earnings. Retirees born after 1953 must receive a minimum of 37.5% of their earnings.

Compulsory supplementary pension

Workers in France also pay into supplementary pensions, which are administered by industry bodies. The most well-known are AGIRC (for executives) and ARRCO (for non-executives), which merged in 2003. Employers and employees make contributions to these pension schemes on a pay-as-you-go basis.

Pension funds calculate your rates based on points accrued during your working career. However, keep in mind that your pension amount is typically calculated against the average of your entire working salary – not the best 25 years as with the state pension.

Pensions advice and support in France

While this guide provides basic advice on the French pension system, it’s important to take professional advice if you’re unsure about how the rules apply to you.

There are many English-speaking financial experts who can advise on your pension in France, such as those at SJB Global. The French Pension Insurance Authority (l’Assurance retraite) also provides advice on retiring in France and applying for a French pension.

Who is eligible for pensions in France?

French pension age

The earliest you can retire in France is 62 (60 if you were born before 1 July 1951). However, authorities encourage and incentivize people to continue in employment for longer. For example, you get a pension increase for every quarter of a year that you work past pension age. Do note that people born after 1 January 1955 cannot claim a full state pension until they’re 67.

Having said that, early retirement is possible in some circumstances. Early retirement typically applies to people who have worked from a very young age (the assurance retraite provides a calculator), those with a disability, or those who have worked in unhealthy environments.

Workers who fit into these categories can retire up to two years earlier than the statutory age. For example, workers with disabilities could retire between the age of 55 to 59. You can find out about the key conditions on the French social security website.

Who can claim a state pension in France?

If you have worked in France for at least 10 years, you can claim a French state pension. Alternatively, you may be able to transfer some pensions from your own country. This can be advantageous for certain expats retiring to France.

What happens if you are not eligible for a full French pension?

Many conditions can affect your French pension. For example, low-paid workers can receive 85% of the country’s minimum payment. The minimum payment is around €636 per month. France also has a minimum income benefit for people reaching 65. Typically, workers with full careers are not eligible for this targeted minimum benefit.

In addition, keep in mind that your French pension payment rate is calculated based on your contributions. So, if you have not contributed for the full term then you won’t get the full pension rate. This also means that you can take early retirement with a decreased pension rate from age 55 or 57 (depending on the year you were born).

Pensions in France for expats

If you don’t meet the requirements for a French pension but have worked in other European countries, you may be able to combine the total number of years worked to qualify for a French pension or get higher pension rates.

The degree to which your periods of employment abroad are counted depends on the country you have previously worked in and whether it has a social security agreement with France. France has bloc-wide agreements in place with EU/EEA countries, as well as Switzerland. So too with many non-EU countries.

QROPS: transfer and consolidate your UK pension

Expats moving to France from the UK may be able to transfer their pensions into a Qualified Recognized Overseas Pension Scheme (QROPS). QROPS allows you to consolidate your pensions into one plan. This allows you to manage your retirement funds more easily and avoid currency fluctuations.

There are many advantages to QROPS. However, they aren’t suitable or available to all UK pensioners. Take advice from an expert financial adviser such as AES.

French pension rates and contributions

The amount of French pension you will receive depends on three factors:

• Your average annual earnings (salaire annuel moyen – SAM). The average earnings on which you paid social security contributions. In 2008, the SAM model was readjusted to take into account the 25 best-earning years rather than a flat average.
• Your pension rate. You can receive a maximum of 50% of your basic salary, with a minimum cap of 37.5% for those born after 1953. Your rate is affected by a percentage that is calculated from how many conditions you meet. For example, if you worked more or less than the required amount of years, your pension rate changes by set percentage amounts.
• The total period of insurance. This typically includes the periods you paid into a social security scheme but other categories count as well. For example, parental leave, industrial, arduous work, or unemployment may qualify toward your French pension period (or insurance period).

Tax on pensions

While pensions are subject to income tax on a progressive scale, there is an annual 10% tax-free allowance for expenses. In 2021, this was capped at €3,912 per household. Tax is based on households rather than individuals to benefit couples where one spouse earns more than the other.

As we mentioned earlier, France has agreements with many of its European neighbors and other countries around the world. These agreements mean many people retiring to France can avoid paying taxes twice.

Supplementary pensions in France

There are two kinds of supplementary pensions in France. Firstly there are voluntary private pensions. Then there are voluntary occupational pensions. The latter can also be known as a company savings plan (plan d’épargne retraite). Both are actively encouraged by the French government. Workers can take out a five-year or 10-year policy and contributions can be as low as €50 a month. As with other pensions, there are caps on tax-free contributions by both workers and employers. Private voluntary pension contributions are tax-deductible up to a ceiling of 10% of your previous year’s earnings.

Employer-paid private pension plans (company pensions) also exist, although are usually for executive employees. You can also opt to take out your own private pension plans via banks, pension funds, or insurance brokers.

Other pensions in France

Survivor pensions

Under certain conditions, a surviving spouse, or even ex-spouse, can be awarded more than half (54%) of a deceased spouse’s pension benefits. To qualify, a surviving spouse must be at least 55 and have an income not exceeding €21,985.60 (for a single person living alone).

Although there is no provision for orphaned children under the basic state pension scheme, supplementary pension plans do make allowance for children to claim between 30% to 50% of the deceased’s pension. Of course, terms and conditions vary from plan to plan.

In some cases, those under 55 on a low income can claim a widowhood allowance. The French pension authority assesses if this applies.

Applying for your French pension

Once you reach the statutory retirement age, you need to contact the National Old-Age Insurance Fund (Caisse Nationale d’Assurance Vieillesse – CNAV). If you live abroad, the French pension authority provides a guide on how to claim an international French pension.

Useful resources

• CNAV – provides a tool to help you calculate your French pension as an international (in French)
• Centre for European and International Social Security Liaison – for details on international agreements that may impact you