1. FRSC COL Update Jan 26 final
Renfrewshire Council · 28 January 2026
Back to Fairer Renfrewshire Sub-committee — 28 January 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: 28 January 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 12 November 2025, there have been a number of changes in economic factors including an increase of 0.2% in the Energy Price Cap from 1 January 2026, meaning households will pay slightly more for their energy use, while inflation reduced to 3.2% in the 12 months to November 2025, with food inflation also falling to 4.2% from 4.9% in October. Elected members are asked to note that: • The rate of inflation is standing at 3.2% in November, falling from 3.6% 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 4.2% in October, after hitting 4.9 % in October. It remains higher than overall inflation. • The Bank of England interest rate was reduced to 3.75% in December after being 4% since August 2025. • The Energy Price Cap, originally introduced by Ofgem in January 2019 to set limits on the underlying rates energy suppliers, is currently set at £1,758 from 1 January, a 0.2% increase on the £ 1775 in 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 12 November 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. Following a period of relative stability from 2015 to 2021, food prices have become a major driver of overall inflation since 2022. Using ONS figures, it is estimated that in 2025, when compared to 2015, food prices will have increased by 3.2 percentage points more than overall consumer prices. 3.3. 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 November Energy Brief reported that the number of people seeking advice around energy from their local CAB from July to September 2025 was 7,500, and that nearly one third of those needed a fuel voucher. Of these clients, 70% had a long-term health condition. 3.4. The cost of essentials; food, fuel and housing remain high, and a significant worry for many families in Renfrewshire. 3.5. The Scottish Budget was announced on 13th January 2026, with several measures likely to impact on households’ income and expenditure, or with implications for the Council’s Fairer Renfrewshire Action Plan. In summary, key budget commitments relevant to the fairness agenda locally are as follows: • Child Payment being increased to £40 per week for families with a baby under the age of one, with the change coming in for 27/28. The current amount (£27.15) will rise by inflation this year. • Changes to Income Tax bands, including raising the threshold of two of Scotland's tax bands. The basic (20%) rate, which currently starts at £15,398, will go up by 7.4% to £16,537. The intermediate rate (21%), which currently starts at £27,492, will also go up by the 7.4% to £29,527. This means people will pay the 19% starter rate on more of their money. • Funding to deliver, by August 2027, a breakfast club for every Scottish primary and Additional Support Needs school pupil.
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3 PUBLIC • Those working in adult social care will receive, as a minimum, the real living wage, which is currently £13.45 an hour. This means they will receive more than the national minimum wage which is £12.21 an hour. • The introduction of two new council tax bands by 2028 for the most expensive properties in Scotland. Higher rates will be paid on properties worth over £1m based on an up-to- date valuation. • An extra £49m funding for measures to mitigate Child Poverty will be announced in the Child Poverty Delivery Plan in March. This will come from the money put aside to mitigate the 2-child limit. • £50 million will be invested in a Whole Family Support package to support parents into sustainable employment, with final details to be again confirmed in the Child Poverty Delivery Plan. • Free access will be provided to school swimming tuition so that every primary school child in Scotland can learn vital aquatic and water safety skills. 3.6. Detail on the implementation and potential impact of budget commitments will require further analysis in due course. 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 5th to 30th November found that 88% of those surveyed reported the cost of living as the most important issue facing the UK today, an increase of 1% in the August figure last reported to the Sub-Committee and around 61% reported that their cost of living had increased compared with a month ago, a slight decrease increase from the 62% last reported, with 37% stating it had remained the same. 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 95% (previously 96%), 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 68% has increased from the 59% reported in August. 4.4. Around 46% of adults reported that a reason for their cost-of-living increasing was the price of their fuel. This has increased since August 2025 (44%) and is rising steadily since a low in October 2024 (32%). 4.5. Further ONS figures show: • Around 4 in 10 adults (41%) planned to reduce their overall spending for Christmas. Of those planning to make Christmas purchases, 31% said they were very or somewhat concerned about affording Christmas. Younger adults (age groups under 50 years) were more likely to
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4 PUBLIC report feeling very or somewhat concerned about affording Christmas this year. This includes 35% of those aged 16 to 29 years and 38% of those aged 30 to 49 years. • 25% planned to use savings and 14% to use credit or payment plans to help spread the cost of Christmas purchases. • Over one in three (34%) 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. • More than one in three (36%) 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, however is an increase on the 31% last reported. • 22% of adults have had to borrow money or use more credit in the last month compared to a year ago. 4.6. The ONS also found that 43% of people are shopping around more, 39% spending less on food and essentials and 60% spending less on non-essentials, while 29% 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 November 2025 shows a default rate on loans of 4.70%. This is the 3rd highest rate since records began in January 2019. 4.8. With regard to Electricity and Gas Direct Debits, the default rate is 2.73%, slightly down on the 3% last reported, and the 4th highest rate ever recorded since records began in 2019. 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 January 2026 and 30 March 2026, the energy price cap is set at £1,758 per year for a typical household who use electricity and gas and pay by Direct Debit. This is an increase of 0.22% compared to the cap set between October and December 2025. 4.10. The table below shows the average unit rates per kilowatt hour (kWh) and standing charges per day under the new Price Cap from 1 January to 31 March 2026:
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5 PUBLIC 4.11. 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. 4.12. In November, Ofgem launched its Energy Aware campaign. Their recent energy consumer satisfaction survey shows that people who better understand their energy system have better customer service experiences and are more likely to choose a better tariff that may be cheaper for them. Officers will utilise the associated toolkit and messaging to support Renfrewshire residents with practical advice and available tools for consumers. 5. Employment and Wages 5.1. According to the ONS, the Claimant Count in November 2025, which is taken from JobcentrePlus administration systems, for those claiming unemployment-related benefits in Renfrewshire is 3,185 people – 1905 men and 1280 women aged between 16 and 64. This is a reduction from 3,330 last reported. The Renfrewshire unemployment rate of 2.7% is less than the Scotland rate (3.5%). 5.2. ONS figures for the UK show that from the period from August to October 2025, annual growth in employees' average earnings for regular earnings (excluding bonuses) was 4.6% and total earnings (including bonuses) was 4.7%. Annual average regular earnings growth was 3.9% for the private sector and 7.6% for the public sector. These increases are all above the rate of inflation,
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6 PUBLIC with the annual growth in real terms, adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs being 0.5% for regular pay and 0.6% 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 £739 for total earnings and £687 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. In November 2025, the UK Government announced that from April 2026 it will be removing the two-child limit so that families can receive the child element of Universal Credit for all children regardless of family size. 6.2. It is estimated that 2 million children across the UK live in households that will see an increase in income as a result of the removal of the two-child limit within Universal Credit in the final year of the UK parliament. Estimates also show that there will be 600,000 fewer individuals in relative low income after housing costs in the final year of parliament as a result of the removal of the two-child limit within Universal Credit. This includes 450,000 children and 150,000 working age individuals. 6.3. 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 via a Two Child Limit Payment. The UK Government announcement negates the need for this payment, with the First Minister instead stating that the funding put aside for the payment will be used to tackle child poverty in other ways, with more details to be provided as part of the Scottish Budget in January 2026. 6.4. 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. 7. Inflation, Food Costs and Foodbank use 7.1. Inflation is standing at 3.2% in November 25, the lowest rate for 8 months. The main downward drivers for inflation when you compare the year to November with the year to October are: • Food and non-alcoholic beverages are rising at 4.2% in the year to November (in October, it was 4.9%) • Alcohol and tobacco were up 4% compared to 5.9% in October • Clothing and footwear fell 0.6% in the year to November compared to a rise of 0.3% in October
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7 PUBLIC • Furniture and household goods fell over the year, down 0.3%, compared to a rise of 0.3% for the year to October • Restaurant and hotel prices rose at 3.5% rather than 3.8% in the year to October 7.2. The latest figures show that although food and drink inflation has slowed slightly, down from 4.9% to 4.2%, 4.2% is still a significant increase in costs for consumers. The Food Foundation’s ‘Basic Basket’, which measures weekly prices of a basket of food for an adult male and adult female as part of a reasonably-costed, adequately-nutritious diet when bought at Tesco shows an increase of 27.7% in a woman’s basket and 33.1% in a man’s basket since April 2022. The current cost of a woman’s basket is now £52.33 per week from a starting point of £40.96, and a man’s basket is now £57.98, from a starting point of £43.95.
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8 PUBLIC 7.3. The Renfrewshire Foodbank issued 1,315 vouchers in Quarter 3 of 2025/26, a slight decrease on the 1,332 vouchers issued during the same quarter last year. The vouchers covered 1,712 adults and 918 children this year, which was an increase in the total number receiving assistance compared to the same quarter last year (1,705 adults and 782 children). The number of vouchers this quarter is slightly less than last quarter when 1396 vouchers were issued covering 1841 adults and 934 children. 7.4. The rising costs of essentials remains the most commonly cited factor in the reason for voucher issue in Renfrewshire, at 551 times. This is compared to the second most cited factor, other unexpected expense at 190 times, while ongoing impact of physical or mental health condition has become the third most cited factor, at 185 times. 7.5. 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 238 vouchers, with 157 of these being priority debt. Priority debt covers essential payments such as rent/mortgage, Council Tax and energy bills. Benefit delay also accounted for a high number of vouchers issued at 111. 7.6. The Ward with the highest number of vouchers issued was Paisley Northwest with 412. Renfrew South and Gallowhill was next at 154, and then Paisley Southwest with 111. This is consistent with the previous quarter. Paisley East and Central was very close behind this at 109, with Paisley North East and accounting for 103 vouchers issued.
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9 PUBLIC 7.7. The table below shows a comparison of the number of vouchers issued in Q2 2025/26 with the same quarter last year. 8. Interest and Mortgage Rates 8.1. On the 18th December, the Bank of England cut its base interest rate to 3.75%. The cut was expected after inflation rates fell to 3.2%. 8.2. The Bank of England Monetary Policy Committee have asserted that the Bank Rate is likely to fall gradually further in future, but that will depend on whether variables like pay growth and services inflation continue to ease. They have said that ‘with every cut in Bank Rate, how much further we go will be a close call’. 8.3. Since the base rate was cut to 3.75% the average fixed rate mortgage rate has decreased. Although rates offered are dependent on circumstances including the amount of deposit paid and value of property, there are currently mortgages available for 3.66% for a fixed term of 2 years for remortgages and 3.97% for the same term for first-time buyers. For 5 year fixed terms, for remortgages, the best rate is now 3.75% and for first-time buyers 4.18%. 8.4. 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 will decrease by around 0.25%, in line with the interest rate decrease.
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10 PUBLIC 9. Housing costs Rental Costs 9.1. Zoopla’s Rental Market Report of December 2025, indicates that rental supply has increased and demand has dropped. Many people coming to the UK to work and study look to the rental market for their housing needs, and Zoopla indicate that a decline in net migration across the UK is having an impact on demand. 9.2. A secondary factor in lower rental demand is improved mortgage affordability for first-time buyers. The UK is on track for more than 350,000 people to buy their first home in 2025, and there was a 20% increase in the number of first-time buyer mortgages in the 9 months to September 2025 (UK Finance). 9.3. While this trend is helping ‘better off’ renters to buy, many households on lower incomes only have private renting as their main housing option. 9.4. Across the UK, rents are now rising more slowly than earnings growth. Zoopla expect this trend to run into 2026 and help repair affordability for renters across the UK. 9.5. Private rent prices in Renfrewshire rose to an average of £832 in November 2025, an annual increase of 7.1% from £777 in November 2024. 9.6. By how many bedrooms there are in a property, average rents as of November 2025 in Renfrewshire/Inverclyde were: • One bedroom: £528 (from £514 in August 25) • Two bedrooms: £696 (from £680 in August 25)
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11 PUBLIC • Three bedrooms: £899 (from £877 in August 25) • Four or more bedrooms: £1,577 (from £1550 in August 25) 9.7. Taking the data instead by property type, average rents were: • Flats and maisonettes: £649 • Terraced properties: £830 • Semi-detached properties: £878 • Detached properties: £1,328 9.8. 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 9.9. In general, house prices have continued to rise, although there are seasonal fluctuations, and ONS figures show that the average cost of a home in Renfrewshire is now £161,000 in October 25, up 6.1% from October 2024. This figure, however, is a slight decrease from the £162,000 last reported for July 2025. This is less than the average house price in Scotland which was £192,000 in October 2025. In the year to October 2025, the average price for detached properties in Renfrewshire rose by 8%, while the average price for flats increased by 3.75%. 9.10. For each property type, average prices as of October 2025 in Renfrewshire were: • Detached properties: £362,000 • Semi-detached properties: £221,000 • Terraced properties: £164,000 • Flats and maisonettes: £104,000
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12 PUBLIC 9.11. The average price paid by first-time buyers was £131,000, which was higher than the previous year’s figure of £124,000. For homes bought with a mortgage, the average house price was £175,000, again higher than the £165,000 paid in October 2024, although less than the Scottish average of £199,000. 9.12. According to Adzuna, a recruitment agency, the average salary for jobs advertised in Renfrewshire in December 2025 was £37,207. Salaries in Renfrewshire have gone up 3.6% year-on-year, slightly lower than the national annual change of 4%, although salaries have fluctuated throughout the year. 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
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13 PUBLIC 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