Measures to increase tax on well-off retirees under consideration for 2026 French budget

Well-off pensioners may face higher tax payments to help France cut its deficit, government ministers have said. 

Potential measures include a reduction in tax allowances for pensioners, or a partial de-indexation of pension increases from inflation.

France is looking to save some €40 billion in the 2026 budget and whilst prime minister François Bayrou said earlier this week that tax increases were off the cards – mirroring earlier comments made by Finance Minister Eric Lombard – others may be keen to champion such measures. 

Employment minister Astrid Panosyan-Bouvet said “all avenues were being explored” on how the savings could be made, and did not rule out a tax rise on well-off elderly people. 

The government should “stop viewing retirees as a homogeneous group,” Ms Panosyan-Bouvet said on the Face-à-Face podcast hosted by media outlet BFMTV.

The majority of France’s pensioners who own their home – and the many who have a second home – are not struggling, the minister claimed. 

“The difficulties are concentrated among those who are not homeowners,” she said.

One potential measure put forward by Industry Minister Marc Ferracci is the end of the 10% tax allowance for retirees, which costs the government around €5 billion a year. 

However, both the far-right Rassemblement National and far-left La France Insoumise are against ending the allowance, and Mr Bayrou is keen to not alienate both ends of the chamber.

If he does unite the rival factions against him, he may face the same fate as his predecessor Michel Barnier and be forced to step down via a motion of no confidence.

Read more: France's 2026 budget: how new plans could affect residents

Tax supported by economists and business owners

French pensioners benefit from several tax allowances so taxing or ending the tax-related benefits for the most well-off pensioners – those with an income of over €4,000 per month – could save France several billion, said director of the Institut Sapiens research organisation Erwann Tison to RMC. 

These benefits “cost France up to €89 billion per year,” he added, claiming that the “very generous system” France has in place is tipped towards retirees. 

“Those who are currently retired have contributed 50 cents for every €1 they receive in pension - they receive twice as much. Whereas now workers receive €1.10 or €1.20 for every €1 contributed.

“We can continue to target working people, but it harms productivity, it harms purchasing power, and it even distorts the value of work because we no longer want to work when we see the pitiful net salaries in certain professions today,” he added. 

“I totally agree that wealthy pensioners should pay full tax,” said former Airbus CEO Louis Gallois earlier this week in an interview with French media LCI.

“The government wanted to de-index all pensions,” he said, discussing controversial plans by former prime minister Michel Barnier to delay indexing pension increases to inflation rates to save money in the 2025 Budget. 

“I think we should have de-indexed some,” he said, referring to well-off pensioners.