U.K. to get a little relief with COLA bump
October 18, 2007
RAF MILDENHALL, England — While the British pound continues to steamroll over the spending power of Americans paid in dollars, some U.S. servicemembers in England will see an increase in their cost-of-living allowance this month.
According to figures released this week, airmen stationed near RAFs Mildenhall, Lakenheath and other bases will see a two-point rise in their COLA index.
The news isn’t so good for military members in Germany or Italy, where rates remained unchanged this week despite the dollar hitting another all-time low against the euro earlier in the month. On Oct. 2, one dollar was worth .6851 euros, a 3-euro cent drop from Sept. 1.
Individual COLA allowances vary according to a member’s rank, years in service and number of dependents, among other factors.
To put the new rate in perspective, an E-6 technical sergeant with three dependents and stationed around Mildenhall or Lakenheath will see his or her daily COLA rate go from about $28.07 for the Oct. 1 to Oct. 15 pay period, to approximately $29.55 from Oct. 16 through the end of the month, an increase of roughly $45 a month.
An O-2 first lieutenant with two dependents and stationed in the Fairford area would see his or her daily COLA go from about $38.53 to $40.13.
The exchange rate between the pound and the dollar was cited as the reason for the boost in the U.K. COLA on the Defense Department’s Per Diem, Travel and Transportation Allowance Committee’s Web site.
In England, the pound has been hovering around $2.10 for the last few weeks, according to military bank exchange rates. In the Mildenhall and Lakenheath communities — home to the majority of airmen in the U.K. — that will result in a COLA index increase to 140 from 138. Bases in the RAF Fairford umbrella, including RAF Croughton, also will see a two-point swing, from 148 to 150.
The British pound has been worth more than $2 for much of this year.
The COLA rate for many U.K. servicemembers dropped earlier this month by four points. U.S. Air Forces in Europe officials attributed that drop to the system’s overpaying and underpaying of COLA throughout the year to avoid drastic shifts in paychecks whenever the exchange rate shifts.
The news of a COLA increase, just a few weeks after the four-point drop was announced, came as a surprise to Senior Airman Dustin Rice, of Mildenhall’s 100th Logistics Readiness Squadron.
“COLA’s going up? I thought it was going down,” he said.
Rice said he didn’t really consider the latest move a raise in light of that earlier decrease, but that it was “a relief” that the rate had changed.
Buying gas, food and everything on base is the way Staff Sgt. Carlos de la Cruz avoids the punishing British pound. He even has a few beers on base before heading out on the town.
He said it was nice to hear the COLA is going up.
“It’s always good to get more money,” he said.
The committee in charge of the changes can alter COLA rates as often as every two weeks.
Maj. Brian Kehl, chief of USAFE’s Accounting and Finance Operations Branch, said earlier this month that if the dollar’s downward trend continues, a COLA raise similar to the one announced this week would follow.
“If the dollar starts getting stronger, you’re going to go in the other direction eventually,” Kehl said in early October.