3/13/2023 0 Comments Cost of living increase 2021![]() ![]() The downside of a higher COLA is for future retiree’s due to the faster depletion of the Social Security fund. The Committee for a Responsible Federal Budget (CRFB) is predicting a 9% to 11.4% increase based on a range of inflation levels. This would result in a $175 increase to the average monthly retirement benefit ($1,668). ![]() In fact the recent 9.1% reading for June 2022 (well above expectations) could also mean a 10.5% cost-of-living adjustment according to estimates from The Senior Citizens League. While the annual report from the SS & Medicare trustees predicted a 3.8% COLA increase in 2023, the ongoing and persistent inflation may result in a 2023 COLA increase of over 10% according to many experts once the final numbers are calculated towards the end of 2022. The higher than normal levels of inflation and related Fed rate actions may have a silver lining for many social security recipients with experts forecasting a record COLA increase in 2023. 2023 COLA Prediction – Significant Increase Expected The government, via the BLS and SSA, publishes the official annual cost-of-living adjustments typically in late October, with changes to social security, retiree benefits and medicare effective for the subsequent year. While experts say there are fairer ways to increase taxes than through national insurance, the plan is relatively progressive and they warn that scrapping it would be a badly targeted way of helping the poorest households with their energy bills.The COLA annual increase is based on the percentage increase (if any) in the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the current year over the average for the third quarter of the previous year in which a COLA became effective. It comes as the government prepares to increase national insurance contributions for workers in the same month, leading to calls from some Tories to scrap the tax raid to ease the pressure on living costs. It estimates that low-income single-adult households could be forced to spend 54% of their income on gas and electricity. While households across the board will be hit, the Joseph Rowntree Foundation estimates the situation is worse for particular families. ![]() According to the Resolution Foundation, the poorest will see their energy spend rise from 8.5% to 12% of their total household budget – three times the proportion for the richest. Line chart of gas prices Tax rises and energy price increases will squeeze budgetsīritain’s poorest households are expected to be hit hardest by the increase in energy bills as they spend proportionately more of their income on energy. It comes after a previous record jump when the cap was last altered in October, when prices went up by about £139 for those on default tariffs. Households are expected to see their gas and electricity bills go up by about 50% from April, an increase worth about £600 for an average annual utility bill, taking the total cost to almost £2,000 a year before any measures from the government to reduce the impact. Consumers have been relatively insulated so far by the government’s energy-price cap, although that will change dramatically in April after Ofgem, the industry regulator, recalculates the limit to reflect wholesale market prices. The surge has triggered an energy crisis across several major nations and led to almost 30 smaller UK household suppliers of gas and electricity going bust in recent months. Gas prices on the wholesale market have soared to record highs in recent months, fuelled by soaring demand after lockdown, cold weather draining reserves and lower levels of wind over the summer affecting renewable energy production. Composite: Guardian/Martin Godwin And gas prices have soared in recent months The price of Brent crude has risen to the highest in seven years at almost $90 a barrel.
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