In summary…
Since January 2026, the increase in the CSG (General Social Contribution) on capital income has raised social security contributions to 18.6% of a 13-year tax year and the flat tax to 31.4% of a 13-year tax year. Dividends, interest, capital gains on securities, and PEAs (Equity Savings Plans) are affected. Life insurance and capitalization contracts are exempt: their social security contributions remain at 17.2% of a 13-year tax year. This difference necessitates a review of investment allocation.
1. What the 2026 Social Security Financing Law changes
The 2026 Social Security Financing Act (Law 2025-1403, Article 12) increases the CSG (General Social Contribution) on capital income to 10.6%. Social security contributions rise from 17.2% to 18.6%. Combined with income tax of 12.8%, the single flat-rate levy under Article 200 A reaches 31.4%.
10,000 euros of dividends cost 3,000 euros in 2025. They cost 3,140 euros in 2026. Interest, capital gains from the sale of securities and gains from the PEA are subject to the same increase.
2. Investments that remained at 17.2 %
The increase does not affect life insurance and capitalization contracts, as well as home savings plans (PEL and CEL), rental income, and capital gains on real estate. For financial savings, life insurance becomes the vehicle with the lowest social security contributions.
After 8 years, Article 125-0 A adds an annual allowance of €4,600 on gains (€9,200 for a couple) to income tax. Beyond this, gains are taxed at 7.5% for premiums up to €150,000, and at 12.8% for premiums exceeding that amount.
The capitalisation contract follows the same rules: social security contributions of 17.2% (%) and an annual allowance after 8 years. It also has the advantage of being able to be gifted without being redeemed.
3. Concrete example
Situation. A married couple receives €10,000 in financial income per year in a securities account. They also hold a life insurance policy that is more than 8 years old, with premiums less than €150,000.
Issue. In the securities account, these €10,000 are subject to the flat tax of 31.4 %: €3,140 per year.
Strategy. The couple finances their needs through partial withdrawals from their life insurance policy, the gains portion of which amount to €10,000 per year. €9,200 is covered by the allowance under Article 125-0 A.
Result. Social security contributions: €1,720. Income tax: 7.5% of €800 (7.5 %), i.e., €60. Total: €1,780 instead of €3,140. A difference of €1,360 each year.
4. Limitations to be aware of
The annual tax allowance only applies after 8 years of holding the contract. A recent contract does not benefit from it: the opening date is more important than the amount paid in.
Social security contributions of 17.2% (%) remain due on the portion of gains from each withdrawal. The exemption applies only to income tax.
The 7.5% tax rate applies to bonuses not exceeding €150,000. Above this amount, the corresponding portion of earnings is taxed at 12.8%.
5. Arbitrate between the envelopes
Securities accounts remain useful for certain strategies, and the PEA (equity savings plan) retains its income tax exemption after 5 years. However, for financial savings intended to generate supplemental income, life insurance policies held for more than 8 years have become the most efficient withdrawal vehicle, within the limits of the annual allowance. The order of withdrawals between different investment vehicles and their allocation to the annual allowance are determined based on the household's overall financial situation.
The transfer is not neutral: selling securities from a securities account to fund a life insurance policy triggers taxation of unrealized capital gains at a rate of 31.4%. The arbitrage is calculated line by line, taking into account any available capital losses.
Frequently asked questions
Is life insurance affected by the 2026 increase in CSG?
No. Its social security contributions remain at 17.2 %, like those of capitalisation contracts.
Does the €9,200 allowance apply to social security contributions?
No. It only concerns income tax. The 17.2 % applies to all withdrawals.
Is the PEA immune to the rise?
No. His earnings are subject to 18.6 % in social security contributions, even after 5 years of ownership.
Are your investments in the right accounts since the 2026 increase? Book a wealth management consultation: we will review their allocation and the order of your withdrawals.
