1a. FRSC COL Update Nov 25 final
Renfrewshire Council · 12 November 2025
Back to Fairer Renfrewshire Sub-committee — 12 November 2025 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: 12 November 2025 _____________________________________________________________________ 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 September 2025, there have been a number of changes in economic factors including an increase of 2% in the Energy Price Cap from 1 October 2025, meaning households will pay slightly more for their energy use, while inflation remained at 3.8% in the 12 months to September 2025, the same figure as July and August and food inflation reduced to 4.5% from 5.1% in August. Elected members are asked to note that: • The rate of inflation is standing at 3.8% in September 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 had increased to 5.1% in August, but reduced in September to 4.5% at the time of the last report and remains higher than overall inflation. • The Bank of England interest rate was reduced to 4% in August 2025 and has remained at that rate. The next announcement on rates is scheduled for 6 November. • The Energy Price Cap, originally introduced by Ofgem in January 2019 to set limits on the underlying rates energy suppliers, is currently at £ 1,775 from 1 October, up £35 a year from the previous quarter. 1.3 This paper provides an overview of information collated by officers in relation at both a national and local level where available.
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2 PUBLIC 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 September 2025 an overview of key context and evidence around current pressures on household finances, both in terms of household income and expenditure, was examined. Increasing fuel costs and food inflation rates and rents mean that many families are still struggling with costs of living. 3.2. Office for National Statistics figures show that costs of living are still very high on people’s agenda. Households are struggling to pay bills and pay off debts as a result of cost of living increases and are defaulting on direct debits. Citizens Advice Scotland in their August Energy Brief reported that the number of people seeking advice around energy has risen 65% since 2019/20, with the average energy debt standing at £2,500. 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 6th to 31st August found that 87% of those surveyed reported the cost of living as the most important issue facing the UK today, an increase of 1% in the June figure last reported to the Sub- Committee and around 62% reported that their cost of living had increased compared with a month ago, an increase from the 59% last reported. 4.2. The ONS figures record that the most commonly reported reason given by adults in the latest period for a rise in their cost of living remains the price of their food shop at 96% (previously 94%), which has been the case since they first asked the question in November 2021. 4.3. The proportion of adults reporting that a reason for their cost-of-living increases was the price of their energy bills at 59% has gradually declined since January 2025 and was last reported for June at 64%. 4.4. Around 44% of adults reported that a reason for their cost-of-living increasing was the price of their fuel. This has increased since June 2025 (38%) and is rising steadily since a low in October 2024 (32%). 4.5. Further ONS figures show: • Around one in four (24%) adults reported that they had borrowed more money or used more credit in the last month compared to a year ago. This is the highest figure since last September.
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3 PUBLIC • Around one in four (24%) adults said they had borrowed more money or used more credit in the last month when compared with a year ago. This has remained stable over the past three years. • Over one in three (36%) adults reported that they believed they would be unable to save any money in the next 12 months. This has remained stable in the past year. • Around one in three (31%) adults who paid energy bills reported that they found these bills very or somewhat difficult. This has fallen from a peak of almost half (49%) of adults in May 2023 and is a slight decrease on the 33% last reported. • A quarter (25%) of adults would be unable to pay an unexpected, but necessary expense of £850. 4.6. The ONS also found that 43% of people are shopping around more, 42% are spending less on food and essentials, 60% are spending less on non-essentials, while 28% are using savings because of cost of living pressures. 4.7. The ONS also publishes statistics for the UK on Direct Debit failure. The most recent statistics for September 2025 shows a default rate on loans of 5.08%. This is the highest rate since January 2024, and is only the second time the rate has been over 5% since records began in January 2019. 4.8. With regard to Electricity and Gas Direct Debits, the default rate is 3%, the highest since records began in 2019. September 2025 is the first time the rate has been as high as 3%. Energy Price Cap and Standing Charges 4.9. 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 October and 31 December 2025, the energy price cap is set at £1,755 per year for a typical household who use electricity and gas and pay by Direct Debit. This is an increase of 2% compared to the cap set between 1 July to 30 September 2025 (£1,720). 4.10. Those paying for energy by pre-payment meter have a slightly lower price cap of £1,707, while those who pay by cash, cheque or quarterly Direct Debit pay more, with a cap set at £1,890 a year on typical use, from 1 October to 31 December 2025. Ofgem says this is higher than for those paying by Direct Debit to reflect the additional costs from suppliers to bill those that don't pay by monthly Direct Debit. 4.11. Part of the charge for energy is made up of standing charges, which have increased from 1 October. Electricity has increased by 2.3 pence a day to 53.7 pence a day and gas by 4.2 pence a day to 34.0 pence a day. Gas and electricity standing charges under the cap were very similar before spring 2022, however electricity standing charges jumped by more than 80% in April 2022 and by more than 10% in April 2023 and April 2024. Average direct debit standing charges under the energy price cap are shown in the following chart.
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4 PUBLIC 4.12. Standing charges are a fixed daily cost faced by households. This means that they form a larger share of total bills for households which use less energy and a smaller share of total bills for households which use more energy. For those who are classed by Ofgem as being low users of energy standing charges for electricity make up 29% of their total bill and for gas, around 21% of the bill. Official UK Government statistics show that lower energy consumption is closely associated with lower household income and higher levels of deprivation. 4.13. As previously reported to elected members, Ofgem had consulted on Standing Charges, and in September 2025 announced that it planned to go ahead with a new requirement for suppliers to offer their customers at least one lower standing charge tariff for all payment methods in all regions and to smart and traditional meter customers. It also launched a one-month consultation on the details of the lower standing charge proposal. Ofgem expects the new lower standing charge tariffs to appear on the market from early 2026. Energy Debt 4.14. In their energy brief of August 2025, Citizens Advice Scotland report that there has been a surge in demand for energy debt advice over the last five years, with the number of people seeking their advice rising by 65% since 2019/20. The average amount owed has also increased, with the average energy debt people are presenting with being £2,500. 4.15. Locally, Renfrewshire Citizens Advice Bureau (RCAB) report the number of clients seeking energy or utilities advice increased from 149 to 185 between Q2 in 2024/25 and Q2 in 2025/26, and the number of individual contacts rose from 190 to 233. While the amount of new energy related debt has reduced from £56,322.29 to £41,153.66 in Q2 of 2025, RCAB report that there is higher level of debt among clients. 4.16. RCAB energy advisers report that one of the reasons for making fewer applications to energy provider’s hardship funds was that many of the outstanding cases they have were for people
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5 PUBLIC whose energy debt was above the cap with which hardship funds were willing to assist (generally around £1,700). These clients needed to bring their energy debt down sufficiently before they could apply to have them cleared and tend to be long standing clients. Therefore, one explanation for the new debt under management for a quarter not reflecting the adviser’s impression of the situation is that debt under management only reflects newly advised of debts, and long term or returning clients with larger amounts of arrears would not be re-recorded. 4.17. Renfrewshire Council Energy Advocates are providing advice to a variety of different households, and they also report clients with large amounts of debt. They have recently started providing fuel vouchers for pre-payment meters through the Fuel Bank Foundation, with the first vouchers being issued in September. It is therefore too soon to identify any trends with regards to clients. 5. Employment and Wages 5.1. According to the ONS, the Claimant Count in September 2025, which is taken from JobcentrePlus administration systems, for those claiming unemployment-related benefits in Renfrewshire is 3,225 people – 1,935 men and 1,290 women aged between 16 and 64. This is a reduction from 3,360 last reported. The Renfrewshire unemployment rate of 2.7 % is less than the Scotland rate (3.0%). 5.2. ONS figures for the UK show that from the period from May to July 2025, annual growth in employees' average earnings for regular earnings (excluding bonuses) was 4.8% and total earnings (including bonuses) was 4.7%. Annual average regular earnings growth was 5.6% for the private sector and 4.7% for the public sector. These increases are all above the rate of inflation, with the annual growth in real terms, adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs being 0.7% for regular pay and 0.5% for total pay. 5.3. Over the long term, average weekly earnings for both total and regular pay show a steady increase. Average weekly earnings were estimated at £727 for total earnings and £680 for regular earnings in July 2025. 5.4. The most recent local figures are from 2024 and show average weekly earnings of £745 overall in Renfrewshire - £803 for males and £708 for females. More recent figures will be provided when these are available. 6. Benefits 6.1. On 17 June 2025, the Scottish Government announced that it would effectively cancel the impact of the two-child benefit cap from 2nd March 2026. The UK-wide policy prevents parents from claiming universal credit or child tax credit for more than two children, with a few exemptions. This negation of the policy will be done via a Two Child Limit Payment which will start to receive applications in March 2026. 6.2. The Two Child Limit Payment will be: • a monthly payment of £292.81 per eligible child. This is the same as the value of the Universal Credit child element for second and subsequent children
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6 PUBLIC • available to households in Scotland who qualify for Universal Credit but do not receive the child element for one or more children due to the two-child limit 6.3. It is estimated that 840 families are affected by the 2 child limit in Renfrewshire, with these households not receiving a child element amount for at least one child. As the policy only applies to children born since 6 April 2017, the number of children potentially affected by it increases each year. 6.4. Applications for the payment open on 2 March 2026 and clients will be able to apply through Social Security Scotland: online, by phone, or in person. Local client advisers from Social Security Scotland will be available across Scotland to assist with applications, including home visits if needed. 6.5. From November, Pension Age Winter Heating Payment replaces Winter Fuel Payment in Scotland. Those eligible will get a payment of between £101.70 and £305.10, and this will be paid automatically in most cases, with letters being sent to confirm payment from November. The payment will made to those over pension age and living in Scotland in the qualifying week, which is Monday 15 September to Sunday 21 September 2025. There are some exemptions to this, such as for those in residential care. 6.6. Social Security Scotland will make the payment automatically to the account used for State Pension or other Scottish benefits, and the amount paid depends on individual circumstances like age and whether other benefits are in payment. For example, someone who is over 80 and living alone will receive £305.10, while if living alone and aged under 80, the amount will be £203.40. 6.7. For those with an income over £35,000, HMRC will recover the payment by either changing their tax code for the 2026 to 2027 tax year or adding the amount to their 2025 to 2026 Self Assessment tax return. 7. Inflation, Food Costs and Foodbank use 7.1. Inflation is standing at 3.8% in September 2025. Despite an increase in food costs this month, price growth in other areas such as air fares slowed, leaving the overall rate of UK inflation at 3.8% - the same as the previous 2 months. Inflation has been above the target rate of 2% set by the UK Government for the Bank of England since October 24, when it reached 2.3%.
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7 PUBLIC 7.2. The latest figures show that food and drink inflation rose for the fifth month in a row in August, increasing to 5.1% from 4.9% in July, but then fell to 4.5% in September. Meat, butter, chocolate, coffee and milk were the items with the biggest price rises. Beef and veal were 24.9% higher in price than this time last year, and butter 18.9% higher. The British Retail Consortium (BRC) said that food costs were outstripping average wage growth, which the ONS said reached 4.7% between May and July. 7.3. The food inflation rate is generally forecast to increase, with one economic research firm, Pantheon Macroeconomics, forecasting that it will peak at 6% in December, with others forecasting a slightly lower rate of around 5.8%. 7.4. The Grocer UK points to consumers changing habits and generally buying fewer food products and looking for discounts as well as purchasing more own label foods due to higher costs. 7.5. The Renfrewshire Foodbank issued 1,361 vouchers in Quarter 2 of 2025/26, an increase of 2.95% in comparison with the 1,322 vouchers issued during the same quarter last year. The vouchers covered 1,796 adults and 908 children this year, which was an increase in the total number receiving assistance compared to the same quarter last year (1,740 adults and 844 children). The number of vouchers this quarter is also slightly more than last quarter when 1,342 vouchers were issued covering 1,775 adults and 854 children. 7.6. The rising costs of essentials remains the most commonly cited factor in the reason for voucher issue in Renfrewshire, at 572 times. This is compared to the second most cited factor, other unexpected expense at 205 times, while ongoing impact of physical or mental health condition has become the third most cited factor, at 151 times.
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8 PUBLIC 7.7. Renfrewshire Foodbank splits priority and non-priority debt as reasons for voucher issue. This quarter, were these to be added together, debt as a whole would be the second most cited reason for voucher issue at 227 vouchers. Benefit delay also accounted for a high number of vouchers issued at 122. 7.8. The Ward with the highest number of vouchers issued was Paisley Northwest with 452. Renfrew South and Gallowhill was next at 153, and then Paisley Southwest with 129. This is consistent with the previous quarter. 7.9. The table below shows the comparison of the number of vouchers issued in Q2 2025/26 with the same quarter last year. 8. Interest and Mortgage Rates 8.1. The Bank of England has cut its base interest rate five times in the past year, most recently in August to 4.00%. This rate remained the same in September, and the next announcement on Interest rates will be on 6 November. 8.2. The Bank of England Monetary Policy Committee have stated that if the economic situation in the UK remains stable, they should be able to reduce interest rates further over time, but are unable to confirm precisely when or by how much. Analysts had not expected the rate to be cut in September, given the inflation rate is almost double the 2% target set by the Government. 8.3. The Governor of the Bank of England stated that ‘any future cuts will need to be made gradually and carefully’, with the timing and scale of those uncertain.
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9 PUBLIC 8.4. Since the base rate was cut to 4% the average fixed rate mortgage rate has decreased. The average two-year deal in September is now 4.19%, down from the 4.50% last reported and the average five-year deal is now also 4.18% down from 4.50%. As previously reported, however, 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 this will still mean an increase in housing costs for those householders. The average Standard Variable mortgage interest rate has also decreased to 6.78% down almost 1% on this time last year. 9. Housing costs Rental Costs 9.1. Zoopla’s Rental Market Report (September 2025) indicates that rental supply has increased and demand has dropped. They indicate that tighter visa rules have led to levels of migration almost halving over 2024, while greater stability in mortgage rates and rising incomes have boosted demand among renters to buy homes, easing some of the excess pressure on the rental market. 9.2. In Q1 2025 there were changes to the way the affordability of mortgages is assessed, which delivered a 20% boost to borrowing capacity for first-time buyers. This may explain a 30% jump in first-time buyer mortgages over the last year, which is one reason that the demand for renting is weakening and more supply is being released. 9.3. Private rent prices in Renfrewshire rose to an average of £813 in August 2025, an annual increase of 8.0% from £752 in August 2024. This was higher than the rise in Scotland (3.5%) over the year. This is an increase of £6 per month on the last reported figure of £807 in June. 9.4. By how many bedrooms there are in a property, average rents as of August 2025 in Renfrewshire/Inverclyde were: • One bedroom: £514 (from £509 in June 25) • Two bedrooms: £680 (from £675 in June 25) • Three bedrooms: £877 (from £871 in June 25) • Four or more bedrooms: £1,550 (from £1537 in June 25) 9.5. Taking the data instead by property type, average rents were: • Flats and maisonettes: £633 • Terraced properties: £813 • Semi-detached properties: £860 • Detached properties: £1,300
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10 PUBLIC 9.6. Many private renters 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. This means affordability is a growing constraint for renters. Home ownership 9.7. In general, house prices have continued to rise and ONS figures show that the average cost of a home in Renfrewshire is now £162,000 in July 25, up 11% from the £146,000 in July 2024 and £3,000 higher than the £159,000 reported for May 25. This is less than the average house price in Scotland which was £192,000 in July 2025. In the year to July 2025, the average price for detached properties in Renfrewshire rose by 13.2%, while the average price for flats increased by 8.7%. 9.8. For each property type, average prices as of July 2025 in Renfrewshire were: • Detached properties: £360,000 • Semi-detached properties: £220,000 • Terraced properties: £164,000 • Flats and maisonettes: £105,000 9.9. The average price paid by first-time buyers was £132,000, which was higher than the previous year’s figure of £120,000. For homes bought with a mortgage, the average house price was £176,000, again higher than the £158,000 paid in July 2024, although less than the Scottish average of £200,000. 9.10. According to Adzuna, a recruitment agency, the average salary for jobs advertised in Renfrewshire in September 2025 was £36,698. Salaries in Renfrewshire have gone up 12% year-on-year, higher than the national annual change of 6.8%, although salaries have fluctuated throughout the year.
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11 PUBLIC 10. Child Poverty statistics UK child poverty 10.1. The Joseph Rowntree Foundation published its Poverty in Scotland report in October 2025. The report found that: • Poverty is deepening: nearly 1 in 10 people in Scotland are in very deep poverty with incomes below 40% of the median (the standard poverty line is below 60%). For families, alongside minority ethnic families, children in large families have the highest deep (30%) and very deep poverty (19%) rates out of the child poverty priority families. • In-work poverty is increasingly more common: 6 in 10 people in poverty live in a household where someone works and nearly three-quarters of children in poverty do. One-third of children in poverty have both their parents in work. • Poverty amongst disabled people remains high: when disability benefits are excluded from the income of households where someone is disabled, the poverty rate for people in a family where someone is in receipt of a disability benefit is 38%. Over half of all children in poverty live in a household where someone is disabled. • Universal Credit (UC) rates are too low to escape poverty: 42% of people in a family in receipt of a low-income benefit, such as UC, were trapped in poverty. • Housing costs are causing poverty, particularly for renters: 1 in 10 people in rented accommodation (private or social rents) are pulled into poverty due to their housing costs.
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12 PUBLIC 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 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