France: Proposed 2027 budget includes pension and tax adjustments

The French government is advancing the 2027 Finance Bill, which introduces several significant changes to taxation and retirement benefits. Key measures include a 2.1% indexation of income tax brackets to mitigate the effects of inflation, as well as a projected 2.1% increase in the tax abatement for individuals aged 65 and older.

Regarding retirement, the Agirc-Arrco complementary pension scheme is expected to see a revaluation of approximately 1.4% starting November 1, 2026, affecting over 14 million retirees. Additionally, the National Assembly has adopted an amendment proposing an early retirement leave option for workers aged 62 who have completed 42 years of insurance contributions.

Other legislative developments include the rejection of a proposal to cap the 10% pension tax deduction at 3,000 euros, and new rules regarding the combination of employment and retirement income. For those receiving survivor pensions, the '3% rule' remains a critical factor, as a portion of personal real estate assets is factored into income calculations, potentially impacting eligibility.