The Income Gap in France: What New INSEE Data Reveals — and What It Means for Households in 2026

New INSEE data shows France’s income gap widening sharply heading into 2026. Here’s who is most affected, why inequality is rising, and what households — including UK expats — need to know.

France is entering 2026 with some of the sharpest income inequalities seen in more than a decade. New figures released by INSEE confirm what many households already feel: the richest families are pulling further ahead, while lower- and middle-income groups are struggling to keep pace with rising prices, higher essential living costs, and a slowing economy.

This widening gap is not unique to France — several European countries are reporting similar trends — but the latest French data helps explain why purchasing power remains a top political concern heading into 2026. Below, we break down what the statistics show, who is most affected, and what it means for both residents and expats living in France.

What the New INSEE Data Shows

According to the latest indicators:

The top 10% of households saw income growth accelerate in 2024–2025, fuelled largely by investment returns, property holdings and higher-paid executive roles.
Middle-income households experienced near-stagnation once inflation is taken into account — meaning “real income” is lower than two years ago.
Households in the lowest income brackets were hit the hardest, due to rising food, transport and housing costs.
Regional inequalities are growing, with Paris and Lyon separating sharply from rural and semi-rural areas.
Purchasing power is down for many families despite wage indexation, because essential costs have risen faster than salary adjustments.

For context, CHB44 readers will recall similar trends from our cost-of-living coverage:

Cost of Living in France 2025: A Realistic Breakdown for Families on a Budget

Who Is Being Impacted the Most?

The data highlights several groups under the greatest pressure:

1. Working Families

Middle-income earners — typically dual-income households — report the highest “cost squeeze” as inflation outpaced salary growth for two consecutive years.

2. Single-Parent and Single-Income Households

Housing, food and transport represent a significantly higher share of income for this group.

3. Rural Households

Despite lower rents, rural areas face higher fuel and transport costs. This mirrors our previous analysis on households struggling with heating and energy bills.

4. Small Business Owners

Our recent report showed that nearly one in two small business managers earn less than the minimum wage:

Record Number of Business Failures: What’s Happening in 2025

5. Young Adults in Urban Centres

Rents in major cities continue to absorb a disproportionate share of income, especially for workers earning below the median wage.

Why Is Income Inequality Widening?

Inflation Outrunning Salaries

Even though inflation slowed in late 2025, price levels remain historically high, eroding disposable income.

Housing Costs Increasing Faster Than Pay

Rents, property taxes and charges continue to rise — especially in metropolitan areas.

Energy and Transport Volatility

Despite temporary government support schemes, households still face unpredictable energy and fuel bills.

Capital vs Labour Gap

Much of the wealth growth has come from investments, property and financial markets — benefiting higher-income households disproportionately.

What This Means for 2026

With the 2026 budget already under scrutiny, the widening income gap presents real economic risks:

Household consumption may continue to fall, already visible in late-2025 retail figures.
Demand for aid schemes like APL and energy cheques may increase.
Borrowing capacity for mortgages will tighten further under new lending rules.
Saving behaviour is shifting, with French households keeping more money in secure accounts.

Readers following the financial stability debate may also want to revisit our analysis of France’s credit rating:

France’s Credit Rating 2025 — What It Means and Why It Matters

What Households Can Do Practically

While inequality is a structural issue, many households are taking practical steps to protect their finances:

Actively comparing banking fees, especially ahead of the 2026 rises.
Using multi-currency accounts to avoid poor exchange rates for cross-border payments.
Tracking energy usage with connected meters and reviewing heating systems.
Separating fixed and variable expenses to improve month-to-month budgeting.
Checking eligibility for housing benefits, energy cheques and local allowances.

If you haven’t already, see our full budgeting tools guide:

Budgeting Tools for Expats in France (2025)

What UK Expats Should Watch Closely

The widening income gap has specific implications for foreign residents:

Rising housing costs in cities like Paris, Nantes and Rennes.
Potential changes to tax brackets in the 2026 fiscal revisions.
Bank disruptions during Christmas and early-2026 reforms.
Inflation-adjusted pension transfers and exchange-rate sensitivity.

This makes it especially important to stay up-to-date with financial legislation and to track cost trends month by month.

Conclusion

The latest INSEE data confirms a reality felt in households across France: the income gap is widening, and 2026 will bring new financial pressures for both French citizens and expats. Whether through rising living costs, regional inequalities or shifting labour conditions, the challenge is shared nationwide.

As new figures are released early next year, CHB44 will continue to update this guide with the latest insights and practical advice.