Key Social and Economic Changes in France Take Effect January 2026 Amid Budget Uncertainty

As of January 1, 2026, France will implement several significant social and economic policy changes affecting daily life and governance, while the government continues to manage budget funding through a special law.

Retirement pensions and social minima will rise by 0.9%, a slower increase compared to last year's 2.2%. The minimum wage (Smic) will increase by 1.18% to €12.02 per hour, translating to a gross monthly full-time salary of €1,823.03. In the Île-de-France region, the Navigo transport pass will become more expensive by 2.3%, reaching €90.80 monthly. Furthermore, real estate agency fees are indexed to inflation, rising by 0.87%, and postal service prices will increase by an average of 7.4%. Cigarette prices for certain brands will also rise by 50 cents.

Mandatory technical vehicle inspections will be expanded to inspect potentially defective Takata airbags, affecting approximately 1.3 million cars on the road. New residential energy performance diagnostic (DPE) methods will decrease the number of energy inefficiency designations, potentially reclassifying 700,000 homes. Additionally, the state energy renovation aid program, MaPrimeRénov’, is suspended due to budget constraints, impacting roughly 85,000 applications.

New provisions effective in 2026 include a 2% interest rate on savings plans (PEL), compulsory online declarations for certain personal gifts, raised minimum compensation for interns at €4.50 per hour, the introduction of pink temporary license plates for new or imported vehicles, and a new type of fixed-term contract dedicated to professional transitions (CDD reconversion).

Meanwhile, uncertainty surrounds France’s 2026 budget. President Emmanuel Macron enacted a special financing law, unanimously approved by Parliament, to temporarily fund the state using 2025 tax rates and allocations. This measure was necessary after a commission of deputies and senators failed to reach consensus on the 2026 budget. The law prohibits any new taxes or spending increases and serves as a stopgap until Parliament resumes budget discussions in January 2026. This approach aims to prevent government shutdowns seen elsewhere but delays crucial decisions amid ongoing differences between legislative chambers.

Prime Minister Sébastien Lecornu expressed confidence that Parliament would set aside political calculations and finalize the budget soon, highlighting defense as a priority due to ongoing geopolitical risks. However, France faces mounting state debt and continued negotiation challenges.

Together, these changes mark a pivotal shift for French citizens entering 2026, as everyday costs rise and government finances navigate uncertainty.