Faced with inflation and its impact on purchasing power, the government has relaxed the rules for unlocking retirement savings for holders of small annuities. An order dated 17 July 2023 raised the minimum buyout threshold for annuities from 100 to 110 euros. Here is how the capital payout of an annuity below €110 per month can help you better manage your savings — a scheme still in force in 2026.
The principle: turning a small annuity into capital
When the savings accumulated in a retirement contract are modest, the life annuity paid out can be very low — a few dozen euros per month — which is of little interest to the retiree. To remedy this, the regulations allow, under certain conditions, this savings to be recovered in a single payment, in the form of capital.
The order of 7 June 2021, amended in July 2023, allows the insurer to offer a capital payout when the monthly annuity would be less than €110 per month, i.e. approximately €1,320 per year. This scheme applies to individual PERs, collective company PERs, the PERP, the Madelin retirement contract and the article 83 plan. As an indication, for a PER, this threshold generally corresponds to accumulated capital of less than €30,000 at the time of liquidation.
An option for the insurer, not an automatic right
This is the key point to understand, and one often poorly presented. The capital payout for a small annuity is not an acquired right for the saver: it is a discretion granted to the insurer, who is not obliged to use it. However, when the insurer offers this payout, it cannot impose it on the beneficiary, whose consent is required.
This requirement of consent strengthens the protection of the saver. The beneficiary’s agreement is now required whatever the contract (PER, PERP, Madelin, article 83…), and the buyout can be carried out during the payment of the annuity, and no longer only at the time of liquidation.
Finally, be mindful of taxation: like the annuity, the capital paid out in this way remains subject to income tax and social security contributions. It is best to anticipate the tax impact before making a choice.
What if your annuity exceeds the threshold?
If your estimated annuity is above €110 per month thanks to an older contract, conversion into capital is not possible as it stands. An alternative exists: transfer your old contract to a Retirement Savings Plan (PER) before its liquidation. The PER indeed offers great flexibility at payout: capital in a single payment, staggered capital, life annuity, or a mixed solution combining capital and annuity.
To study the option best suited to your situation, our retirement and employee savings expertise can guide you.
Cases for early release of the PER
Beyond the payout for a small annuity, the Pacte law broadened the situations allowing a PER to be unlocked before retirement, in capital. These cases are:
- the death of the spouse or PACS partner;
- the expiry of unemployment benefit rights;
- invalidity (of the holder, their children, their spouse or partner);
- over-indebtedness (at the request of the over-indebtedness commission);
- the cessation of non-salaried activity following a judicial liquidation;
- the purchase of the main residence (excluding mandatory contributions).
The details of these conditions can be consulted on Service-Public.fr.
MIA Assurances is here to help
Choosing between annuity and capital, transferring an old contract, anticipating the taxation at payout: these decisions commit your savings over the long term and deserve personalised advice. As a brokerage firm specialising in savings and retirement, MIA Assurances supports individuals and companies in optimising their contracts and preparing calmly for the future.
FAQ – Capital payout of a small annuity
- What is the threshold for turning an annuity into capital?
The insurer may offer a capital payout when the annuity would be less than €110 per month, i.e. approximately €1,320 per year.
- Is it a right for the saver?
No. It is a discretion left to the insurer, who is not required to offer it. However, it cannot be imposed without the beneficiary’s consent.
- Which contracts are concerned?
Individual and collective PERs, as well as the older contracts: PERP, Madelin and article 83.
- Is the capital paid out taxable?
Yes, it is subject to income tax and social security contributions, as the annuity would have been.
- What if my annuity exceeds €110 per month?
You can consider transferring your old contract to a PER before liquidation, to benefit from its flexibility of capital payout.
