1. FRSC COL Update Sep 26 v2
Renfrewshire Council · 2 September 2026
Back to Fairer Renfrewshire Sub-committee — 2 September 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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1 PUBLIC ________________________________________________________________________ To: Fairer Renfrewshire Sub-Committee On: 2 September 2026 _____________________________________________________________________ Report by: Chief Executive _____________________________________________________________________ Heading: Cost-of-living Update ________________________________________________________________________ 1. Summary 1.1. At each of the Fairer Renfrewshire Sub-Committee meetings, an overview of key context and evidence around current pressures on household finances, both in terms of household income and expenditure has been provided to members. 1.2. Since the last meeting of the Sub-Committee on 3 June 2026, there have been a number of changes in economic factors including an increase of 13% in the Energy Price Cap from 1 July 2026, meaning households are currently paying more for their energy use while inflation rose to 2.9% in the 12 months to July, up from 2.6% in June, driven largely by higher energy bills. Elected members are asked to note that: • The rate of inflation is standing at 2.9% in July, rising from 2.6% the previous month and has been above the target rate of 2% set by the UK Government for the Bank of England since October 2024, when it reached 2.3%. • The inflation rate for food has decreased to 1.3% in June, down 0.4% from last month. It is now lower than overall inflation and at its lowest rate for almost 5 years, however the outlook for food prices is unstable, with prices expected to rise more again in the coming months. • The Bank of England interest rate was held at 3.75% in July due to the conflict in the Middle East and associated inflation rises. The next announcement is due on 17th September. • The Energy Price Cap, originally introduced by Ofgem in January 2019 to set limits on the underlying rates energy suppliers, is currently set at £1,862 from 1 July, with continued
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2 PUBLIC conflict in the Middle East leading to an uncertain energy disinflation path according to economists. 1.3. This paper provides an overview of information collated by officers in relation at both a national and local level where available. 2. Recommendations 2.1 It is recommended that members of the Fairer Renfrewshire Sub-Committee note the content of the report. 3. Background 3.1 At the Fairer Renfrewshire Sub-Committee meeting on 3 June 2026 an overview of key context and evidence around current pressures on household finances, both in terms of household income and expenditure, was examined. Household costs continue to rise, and although inflation rates have come down compared to last month, prices are still climbing, albeit at a slower rate. 3.2 UK inflation, as measured by the consumer prices index (CPI), increased to 2.9% in the year to July - up from 2.6% in the 12 months to June. This increase has been attributed to higher energy bills due to the situation in the Middle East which remains volatile. Analysts warn that an increase of 4% in the energy price cap is expected for October. 3.3 Fuel prices at the pump fell in June, however the average price of a litre of petrol climbed to 160p at the end of July again due to continued instability in the Middle East. That was about 27p more than before the conflict, and represented a three-and-a-half year high. While regional tensions remain, it is likely that petrol and diesel costs will continue to fluctuate. 3.4 Food and non-alcoholic beverage inflation fell by 0.4% month-to-month, with beef and chicken seeing a reduction along with sugar, chocolate and confectionery. Looking at inflation over the year, beef and veal price inflation eased from 9.4% in the 12 months to May to 5.1% in the year to June, while pizza and quiches, for example, fell by 6.7% in the year to June. The British Retail Consortium (BRC) said lower food inflation was also driven by "intense competition between supermarkets". Food inflation, however, often has a lag of up to 13 months due to the supply chain, so any effects from the conflict in Iran could still be yet to come. 3.5 Both Office for National Statistics and Scottish Government figures show that costs of living are still very high on people’s agenda. The Scottish Government Public Insight Monitor for May 2026 (a survey by YouGov of 1136 Scottish Adults) found that 33% were worried about household finances and 38% about the cost of groceries, while 39% were worried about energy/fuel prices, which was a 10% increase on the previous survey in February. 67% (an increase of 3%) agreed either strongly (24%) or generally 43% that the cost of living would have a long term negative impact on their family. Only 4%, agreed that the cost of living crisis is easing, with only 2% strongly agreeing this.
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3 PUBLIC 3.6 According to the Joseph Rowntree Foundation Cost of Living Tracker, Summer 2026, the cost-of- living crisis is becoming more widespread, with 7.4 million low-income families unable to afford essential items in the last 6 months. They report that this is the highest number since they began running the cost of living tracker survey in 2021. They have found that there has also been an increase in the number of families being forced to cut back on meals or go hungry, an increase in the number of families in arrears on their household bills and credit repayments, and an increase in the number of families borrowing money from high-cost lenders such as loan sharks and payday lenders to buy essentials. 3.7 While some cost of living pressures have eased slightly in the last month, families with low incomes and those relying solely on benefits are struggling to afford essentials. 4. Impacts of cost-of-living crisis Living costs 4.1 The latest insights into the cost of living from the Office of National Statistics for the period 3rd to 28th of June found that 88% of those surveyed reported the cost of living as the most important issue facing the UK today and around two-thirds (60%) of adults reported that their cost of living had increased compared with a month ago, which is slightly higher than a year ago, although down from a high of 79% in April 2026. Around 6 in 10 adults (63%) reported being very or somewhat worried about their costs of living. 4.2 Among those reporting that their cost of living had increased compared with a month ago, the price of food shopping remained the most commonly reported reason at 95%, up 4% from the last reported figure); the proportion reporting the price of fuel as a reason for increased living costs increased is 74% and the proportion reporting energy bills as a reason for increased cost of living was 67%, an increase from the 61% last reported. The price of food shopping has been the most commonly reported reason given by adults for a rise in their cost of living since ONS first asked the question in November 2021. 4.3 Further ONS figures show: • Around 1 in 3 (35%) adults who pay energy bills reported finding it very or somewhat difficult to afford these bills. • Around 1 in 5 (20%) adults reported that they had borrowed more money or used more credit than usual in the past month compared with a year ago. • In the period 7 January 2026 to 29 March 2026, among adults currently paying rent or mortgage payments, around 1 in 3 (35%) reported finding it very or somewhat difficult to afford these payments.
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4 PUBLIC • Just over 1 in 20 (6%) adults reported they had been unable to pay a direct debit, standing order, or bill in the past month. • 13% of adults disagree or strongly disagree that their household income covers their minimum living expenses. 4.4 The ONS also publishes statistics for the UK on Direct Debit failure. The most recent statistics for June 2026 show a default rate on loans of 4.95%, while for Electricity and Gas Direct Debits, the default rate is 2.65%, a reduction from the 2.92% last reported. 4.5 Within Scotland, according to the Scottish Government Public Insight Monitor 81% took some form of action to help manage their household finances over the last 6 months. This survey also showed that 55% of adults had spent less on non-essential items to help manage their household finances, while 34% had used savings and 18% had cut back on essentials such as food. 45% had also taken steps to reduce energy use in the home, eg. less heating and hot water. Energy Price Cap, energy costs and debt 4.6 The energy price cap is the maximum amount energy suppliers can charge customers for each unit of energy and standing charge if they’re on a standard variable tariff. Between 1 July 26 and 30 September 2026, the energy price cap is set at £1,862 per year for a typical household who use electricity and gas and pay by Direct Debit. This figure is 13% higher than that for the previous quarter and is expected to rise again from 1 October due to the conflict in the Middle East. 4.7 The table below shows the average unit rates per kilowatt hour (kWh) and standing charges per day under the Price Cap from 1 April and from 1 July for a dual fuel, direct debit customer: 1 April 2026 1 July 2026 Electricity Unit Rate 24.67p/kWh 26.11p/kWh Elec Standing Charge 57.21p/day 57.19p/day Gas unit rates 5.74p/kWh 7.33p/kWh Gas Standing Charge 29.09p/day 29.04p/day 4.8 The Citizens Advice Scotland Energy Brief of May 2026 reports record levels of energy debt recorded across the Citizens Advice network in Scotland from January to March 2026. The average debt brought to CAB by people was on average over £2,800 rising to over £3,200 in rural areas. A total of £2.7 million of energy debt was brought to the network in the first 3 months of
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5 PUBLIC 2026, and 70% of people who needed support with energy debt were living with a long-term health condition or disability. CAS’s evidence demonstrates that people in employment are not immune from the harms of high energy bills and the need for crisis support, with 16% of the people who came to them for energy advice being in full- or part-time work. 4.9 Locally, Renfrewshire CAB have seen energy debt reflecting that within the national brief, with the Renfrewshire figure of those in employment coming forward for energy advice also being 16%. The Advice Works team have also seen a rise in fuel debt, with clients owing £58,738 in Q1 this year compared to £30,755 for the same quarter last year. 4.10 Renfrewshire’s Energy Management Unit also provide fuel vouchers. For 2026 so far, 230 vouchers have been issued, helping 264 adults and 126 children. 4.11 On 21 July it was announced by the UK Government that VAT on electricity bills would be removed from 1 October for 6 months. Analysts also predict, however, that the energy price cap may rise with Money Saving Expert forecasting a rise of 5.1%, or £93 and Cornwall Insight a rise of 4% from the same date for those who are not on a fixed term deal. Those on a fixed term deal will see a reduction of 4.8% on their payments for electricity, however gas bills will not be affected. 5. Fuel Costs 5.1 Fuel prices which surged since the war in the Middle East began have started to come down. The RAC reported that the average price of a litre of diesel at UK forecourts fell by more than 16p between the start and end of June, marking the largest such decrease since records began in 2000. This was driven by news of an interim ceasefire deal between the US and Iran to end the conflict, prompting oil prices to fall below pre-crisis level. 5.2 Households, however, face a renewed energy price shock after oil topped $100 a barrel on 23 July for the first time in more than two months and gas prices also rose. With uncertainty continuing in the Middle East, analysts warn that energy bills, food and fuel may continue to rise affecting households’ finances. 6. Employment and Wages 6.1 According to the ONS, the Claimant Count in June 2026, which is taken from JobcentrePlus administration systems, for those claiming unemployment-related benefits in Renfrewshire is 3,470 people – 2,095 men and 1,370 women aged between 16 and 64. This is an increase from 3,445 last reported. The Renfrewshire unemployment rate of 2.9% is less than the Scotland rate (3.1%).
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6 PUBLIC 6.2 The chart below shows the claimant count by age, showing that for those aged 18 – 24 the percentage of those claiming out of work benefits is slightly higher than the Scottish average, although less than that of Great Britain. 6.3 In the UK from March to May 2026, annual growth in employees' average earnings was 3.4% for regular earnings (excluding bonuses) and 4.3% for total earnings (including bonuses). Using the Consumer Prices Index excluding owner occupiers' housing costs (CPI) to adjust for inflation, annual growth in real terms was 0.4% for regular pay and 1.3% for total pay. 6.4 Annual average regular earnings growth was 5.5% for the public sector and 2.9% for the private sector; public sector annual pay growth continues to be affected by variations in the timing of pay awards this year. After the public sector, the wholesaling, retailing, hotels and restaurants sector showed the strongest regular annual growth rate (3.6%). 6.5 Over the long term, average weekly earnings for both total and regular pay show a steady increase, with some minor dips.
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7 PUBLIC 7. Inflation, Food Costs and Foodbank use 7.1 Inflation , increased to 2.9% in the 12 months to July, up from 2.6% in June, driven largely by higher energy prices. 7.2 Food inflation was 1.3% in July, down from 1.7% in June. The largest reductions came from beef and breaded chicken, with smaller reductions from vegetables, sugar, chocolate and confectionery. Prices rose the fastest for fish, breads and cereal. Although food inflation has fallen, the ONS found that the price of food has increased by 30.1% since April 2022. The chart below from the Food Foundation shows food the relationship between food and general inflation since 2021. 7.3 These inflationary changes are continuing to impact on people’s ability to afford the food they need each week. The Food Foundation’s Basic Basket tracking the cost of a weekly shop at Tesco has seen the female basket of food now costing £53.51 per week, with the male basket costing £60.24 per week. This has increased from the £52.98 and £59.38 reported in June and shows an increase since April 2022 of 30.6% and 38.4% respectively. 7.4 When broken down into ‘Eatwell’ food categories, which show how much of what we eat overall should come from each food group to achieve a healthy, balanced diet, the Food Foundation find that food and drinks that are high in fat, salt and/or sugar are the only food group to decrease in price from 2024 to 2025. Protein foods saw the largest annual increase in price at 4.0%, followed by fruit and vegetables at 1.7%. The report also found that households with children in the lowest income quintile would need to spend 85% of their disposable income on food to afford the Eatwell Guide, compared to 11% for an average household in the highest income quintile.
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8 PUBLIC 7.5 While uncertainty over the Middle East continues, the Food and Drink Federation, has revised its food inflation forecast. Previously, the FDF forecast that the rate of food inflation would reach 9% by the end of the year, however they now anticipate rising food price inflation as the year goes on, however this is likely to be lower, come later and plateau for longer with less of a sharp peak. 7.6 The Food Foundation also points to drought, high temperatures and wildfires over the summer months having an impact on future food prices, with the potential for prices to go up due to poor harvests. 7.7 Foodbank statistics for Quarter 1 show that 1,085 vouchers were issued, supporting 1,440 adults and 676 children. This is a decrease on the same time last year when 1,342 vouchers were issued supporting 1,775 adults and 854 children. 7.8 The three wards showing highest demand were Paisley Northwest which accounted for 339 vouchers, with Paisley East and Central accounting for 129 and Renfrew South and Gallowhill, accounting for 105. Lowest demand for vouchers came from Bishopton, Bridge of Weir and Langbank at 8. 7.9 Single adult households accounted for 594 vouchers, and those for whom benefits was their only income accounted for 910. 7.10 Rising cost of essentials was the reason a voucher was issued in 412 cases, with other unexpected expense at 245 and debt, when priority and non-priority debt is taken together, accounted for 177 vouchers. 8. Interest and Mortgage Rates 8.1 On the 30 July, the Bank of England held its base interest rate at 3.75%, where it has been since the end of 2025. The bank stated that conflict in the Middle East has disrupted the transportation and supply of energy, raising its price and pushing up households’ motor fuel costs and utility bills, and that although prices have fallen since the initial spike the conflict makes predictions difficult. 8.2 The Bank is monitoring the situation closely and while inflation has fallen to 2.8% they expect it to go up again as the energy price rises have their knock-on effects, with higher bills potentially forcing businesses to increase their own prices to cover the cost. In addition, they recognise that workers may ask for higher wages as their bills have also gone up. 8.3 Mortgage rates remain volatile, with average two- and five-year fixed rates earlier this week jumping by their biggest daily margin since around the start of April, according to analysis from finance site Moneyfacts. This jump was again linked to the recent escalation of conflict in the Middle East. Mortgage rates had reduced slightly since those last reported to elected members in
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9 PUBLIC June 2026, but have now risen again with the typical rate charged by a two-year fixed mortgage deal sits at 5.57% on 22nd July (up from 5.47% the week before), while the average five-year fixed mortgage currently charges 5.60% (up from 5.49% over the same time frame). 8.4 It was also reported that 100 mortgage deals had been withdrawn within the week to 22 July, including from Barclays, HSBC and Lloyds banking group. As previously reported, about 800,000 fixed-rate mortgages, currently with an interest rate of 3% or below, are expected to expire every year, on average, until the end of 2027, so higher mortgage rates mean, in some cases, a significant increase in housing costs for those householders. 9. Housing costs Rental Costs 9.1 Private rent prices in Renfrewshire were an average £795 in June 2026, down from an average of £826 in March 2026, and an annual decrease of 1.4% from £807 in June 25, however, an increase of 3.2% from the £802 in March 2025. Across Scotland, the average rental price rose slightly by 1.3% over the year. 9.2 By how many bedrooms there are in a property, average rents as of June 2026 in Renfrewshire/Inverclyde have shown a slight reduction across the board from the previous report and were: • One bedroom: £509 (from £527) • Two bedrooms: £670 (from £694) • Three bedrooms: £860 (from £894) • Four or more bedrooms: £1,516 (from £1,567) 9.3 Taking the data instead by property type, average rents, again reduced in all types, were: • Flats and maisonettes: £626 (from £647) • Terraced properties: £794 (from £826) • Semi-detached properties: £839 (from £871) • Detached properties: £1242 (from £1,304)
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10 PUBLIC 9.4 According to Zoopla, where rents have decreased, this is due to competition for rented homes falling. Many private renters, however, are on below-average household incomes. Almost a third rely on housing benefit to support rental costs, where the allowance has not kept pace with rental increases. While there is some good news that rents have reduced slightly to June 2026, affordability is still an issue for many low-income families. Home ownership 9.5 In general, house prices have continued to rise, and ONS figures show that the average cost of a home in Renfrewshire is now £159,000 as of May 2026 up 3.4% from May 2025, with the average price for a home bought with a mortgage also increasing to £174,000 from £167,000 the previous year. 9.6 For each property type, average prices as of May 26 in Renfrewshire were: • Detached properties: £364,000 (up from £353,000 last reported) • Semi-detached properties: £220,000 (up from £219,000 last reported) • Terraced properties: £163,000 (the same as £163,000 last reported) • Flats and maisonettes: £102,000 (down from £103,000 last reported) 9.7 The average price paid by first-time buyers was £129,000, which was 2.7% higher than the previous year’s figure of £126,000. 9.8 According to the UK House Price Index, typical payments on a 5 year fixed mortgage for an average flat in Renfrewshire is £412 with a deposit of £30,000 and a 25 year mortgage. The average price for a flat property in Renfrewshire is £102,000 in May 2026. This has increased by 18% since May 2021. The average price for a terraced property in Renfrewshire is £163,000 in February 2026, having increased 29% since May 2021. Typical payments on a 5 year fixed
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11 PUBLIC mortgage for an average terraced property in Renfrewshire are £784 with a deposit of £30,000 and a 25 year mortgage. Semi detached home prices have also increased 31% since 2021, up to £220,000 and mortgage payments up to £1,122 a month. Detached homes have risen by 30% to £364,000 with mortgage payments of £2,037. 9.9 According to Adzuna, a recruitment agency, the average salary for jobs advertised in Renfrewshire in July 2026 was £35,681. Salaries in Renfrewshire have gone down 0.2% year-on-year, while the average national change is 3.9%, although salaries have fluctuated throughout the year. 10. Joseph Rowntree Foundation Cost of Living Tracker 10.1 The Joseph Rowntree Foundation Cost of Living Tracker for Summer 2026 has found that more families than ever are going without essentials. Their survey found that 62% of respondents have not been able to afford at least 1 essential item in the last 6 months. That is equivalent to 7.4 million families across the UK, up from 7.1 million just one year ago. Essential items include basic toiletries and suitable clothing and shoes as well as food and heating.
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12 PUBLIC 10.2 Households that are most likely to be unable to afford essentials are those in receipt of Universal Credit (UC), those headed up by someone under the age of 25, those headed up by someone from a Black or Mixed ethnic background, those containing non-UK citizens, and those with 3 or more children or in lone-parent families. More than 80% of each of these households have been unable to afford an essential item in the last 6 months. 10.3 Almost half (47%) of all low-income families responding to the survey said they had gone hungry, cut down the size of their meals, or skipped meals in the last 30 days because they didn’t have enough money for food. Scaled up across the country this equates to 5.6 million households that are going without food because they cannot afford it, a number that has continued to edge up over the last couple of years, from 5.5 million in May 2025 and 5.3 million 2 years ago. Although food inflation has been markedly lower during this period than the high of 19.2% reached in March 2023, that does not mean food prices have come down, merely that they are not growing quite as fast, and the price of food has continued to rise more quickly than general inflation on average during the last year (food inflation averaged 4.1% over the period May 2025 to May 2026 compared to 3.6% for overall inflation). That has a greater impact on lower-income households because they spend a greater proportion of their income on food. 10.4 According to the report, there has been a worrying uptick in borrowing from loan sharks, payday lenders, doorstep lenders and pawnbrokers to pay for essential items, reversing the decline observed in the previous wave of the survey. While the number of low-income households using high-cost lending to buy essentials is lower than at its peak in May 2025, the number is creeping back up and is higher than it was 2 years ago. In May 2026 an estimated 1.3 million low-income families had used this type of lending to pay for food, housing and other essential bills such as Council Tax, electricity, gas and water. 10.5 The report also points out that for the vast majority, being unable to afford an essential item is not an isolated experience. In most cases, households have been forced to go without essentials
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13 PUBLIC on multiple occasions over the last 6 months, and in many cases have had to do so on a weekly basis. The survey reveals that for many the crisis is becoming a permanent reality: • 42% of families that have heated their home less than needed have now been doing it for more than 2 years. • 39% of families that have reduced the number of showers or baths they take to reduce costs have now been doing it for more than 2 years. • 38% of those who have stopped socialising with friends have done so for more than 2 years. • 34% of those who have stopped making pension contributions from their salary have done so for more than 2 years. Implications of the Report 1. Financial – There are no financial implications associated with this report, which provides an overview of the position and is for noting. 2. HR & Organisational Development – none 3. Community/Council Planning – This report provides a detailed summary of the current evidence relating to household income and expenditure. Wider poverty related issues are a key element of both the Council and Community Plan and the information included within this report is part of the wider Strategic Needs Assessment for these plans. 4. Legal - none 5. Property/Assets - none 6. Information Technology - none 7. Equality and Human Rights – The report provides an overview of the position around household income and expenditure, and is for noting. As such there are no impacts arising from the recommendation of this paper. It is however important to note that impacts on households explored within this paper are likely to be disproportionately felt by equality groups. 8. Health and Safety - none 9. Procurement – none 10. Risk – none 11. Privacy Impact – none 12. Climate Risk - none 13. Children’s rights – the articles within UNCRC underpin the work that is being progressed in Renfrewshire through the Fairer Renfrewshire programme, particularly in relation to rights in relation to aspects such as life, survival and development, food, clothing and a safe home and
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14 PUBLIC supporting the best interests of the child and their families. Child poverty and family wellbeing are key local partnership priorities. 14. COSLA Policy Position – none Author: Diane Dunn, Fairer Renfrewshire Manager, diane.dunn@renfrewshire.gov.uk