Taxes, retirement, salary, booklets… The winners and losers of 5% inflation in 2023

Prices will increase by 5% in 2023, according to the latest INSEE forecast. A rise in inflation which directly impacts the revaluation of the Livret A and LEP rates, APLs, retirement pensions, property tax and even salaries. Here is what awaits you.

Prices in 5% increase over one year, in 2023, compared to 2022… while inflation was already 5.2% in 2022 compared to 2021. This is the INSEE estimate for annual inflation for 2023, published on 15 June. A first forecast which obviously remains provisional and confirmed at the start of 2024. But it allows us to project ourselves on the revaluations of the coming months. Overview, from the nearest program rise furthest in time.

LEP and Livret A: permanently high rates

Here is the fastest chance. From mid-July, the Banque de France will know the final inflation for the month of June. Figure necessary to calculate the rates of the Livret A, the booklet of sustainable development and solidarity (LDDS) and the people’s savings booklet (LEP), even if Bercy can choose to waive the formula.

The trend? At this stage, the Livret A rate must automatically exceed 4% on 1 August. But… An increase in the Livret A rate would penalize other investments. 4%, it would peak in the hierarchy of rates, judges the economist Philippe Crevel. His prognosis: The Minister of the Economy could retain the rate of 3.5%, a rate halfway between that currently in force and that resulting from the application of the formula. For the popular savings account, the rate [plus mcaniquement bas sur l’inflation] could drop from 6.1% to 5.6% on August 1st.

• When? August 1, 2023.
• How much? 5.6% and 3.5%, probably.

Booklet A, LEP: these two bad news that await you in August

APL: new 3.5%, in October 2023?

Housing aid increased by 3.5% last year, from July, a measure carried by the purchasing power law but which corresponded ultimately mathematical logic: the annual revaluation takes place each year in October on the basis of the rent reference index (IRL) for the 2nd quarter. It will be known mid-July. suspense? It is low: the IRL is perfectly stable around 3.5% over the last three quarters.

As a reminder, the increase in rents is currently capped at 3.5%, a current cap at this stage until June 30, 2023. An extension until June 2024 is under study at the Assembly.

• When? October 1, 2023.
• How much? About 3.5%.

Retirement, rent, RSA, APL… The perverse effects of inflation-indexed revaluations

Agirc-Arrco supplementary pension: 5% increase?

Here again, it is impossible to establish an affirmative forecast: the joint negotiations (unions and employers) of Agirc-Arrco are at a standstill. However, these negotiations must not only renew a steering agreement for the supplementary scheme over several years but also set the annual revaluation, which will apply to Agirc-Arrco pensions from November.

The calculation of the revaluation based on the average salary per head (SMPT, +5.1% according to INSEE in the 1st quarter and as an annual average estimated for 2023) and the annual inflation forecast (5%, therefore), the increase in the Agirc-Arrco point should probably be around 5%.

• When? November 1, 2023.
• How much? About 5%?

Pension reform: and now, the battle for the complementary Agirc-Arrco

Smic and wages: no boost before January 2024

Bad news, if you are paid at the level of the Smic: Our forecast would not imply an automatic revaluation of the Smic by the end of the year, slipped in mid-June the head of the economic department of Insee, Julien Pouget: It remains a forecast, it is not unthinkable at the beginning of autumn 2023 but at this stage it is not our forecast.

Should we expect a new automatic increase in the minimum wage in 2023?

The next increase in the Smic would therefore be the annual increase program on January 1, 2024. How much? Impossible to predict. In a completely approximate way, the Smic having already increased by 2.2% in May, and monthly inflation expected to decline below the 5% mark during the autumn, the increase in January 2024 should probably be around 2% .

Wages follow a different rhythm, except for low wages close to the minimum wage, which are mechanically driven by increases in the minimum wage. Salary increases reached 4.4% in 2023 according to INSEE and the increase in the average salary now exceeds slightly 5%.

• When? January 1, 2024.
• How much? About 2%?

Pension insurance: boost for the basic pension

Between the anticipated boost of 4% in the summer of 2022, then the annual increase of 0.8% in January 2023, the revaluation of the pension from the general scheme was slightly less than 5% in 2023 compared to the beginning of 2022 .

The next annual increase will take place on January 1, and will be visible on the pension Retirement insurance (Carsat) paid in February 2024. Calculation formula? Average over 12 months stopped in October 2023 (period from November 2022 October 2023), compared to that of the previous 12 months (November 2021 October 2022). It is difficult at this stage to establish a precise estimate, but an increase close to 5% is possible.

• When? January 1, 2024.
• How much? About 5%?

Income tax: a new scale revalued by 5%?

Attention counter-intuitive mechanism: when the progressive scale of income tax increases it is… good news for taxpayers’ wallets. This means that the income thresholds from which you pay the tax are increasing, and therefore mathematically the bill will be lower for tax households.

In 2023, the 2023 tax scale on 2022 income increased by 5.4%. A figure not fixed by an automated calculation rule but decided by the government in the finance bill… on the basis of INSEE estimates. Barring surprise for a government making the absence of a tax increase its line of conduct, the scale should once again be raised to the level of inflation, around 5%. But it is not automatic!

• When? 2024.
• How much? About 5%?

Taxes 2023: how much less do you pay thanks to the new scale?

Property tax 2024: less dirty increase than in 2023?

For 2023, mass has already been said… or almost. The basis for calculating your property tax 2023 the cadastral rental values ​​(VLC) are revalued by 7.1%. Translation: global and standard increase of more than 7% of this local tax. Unless your municipality or department decides to lower its rate.

The evolution of your property tax depends on both the increase in VLC and local rates. However, your municipal rate depends on the budgetary decisions of your city and intermunicipal authority, or those of your department. Final verdict in a few weeks: property tax notices will be distributed at the end of September.

And in 2024? The next evolution of VLCs will be decided in the fall based on the Harmonized Index of Consumer Prices (HICP) for November, which was 7.1% in November 2022. The HICP for November 2023 will decide the fate of owners in 2024. INSEE does not provide an estimate of the HICP for the coming months, but this harmonized index for international comparisons is close to the classic CPI, expected at 4.8% in September and 4.4% in november. Clearly, the increase in the property tax should be less dirty in 2024 than in 2023.

• When? 2024.
• How much? Less than 5%?

RSA and activity bonus: a (very) distant perspective

Social benefits increase each year on April 1, on the basis of inflation data stopped in January… and the increase is visible on the aid paid in May. It is therefore far too early to predict these future increases, the calculation being based, as for the basic pension, on a formula involving the CPI over 24 months.

• When? April 1, 2024.
• How much? Answer in the fall.