1. FRSC COL Update Mar 26 v0.2
Renfrewshire Council · 25 March 2026
Back to Fairer Renfrewshire Sub-committee — 25 March 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 OFFICIAL ________________________________________________________________________ To: Fairer Renfrewshire Sub-Committee On: 25 March 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 28 January 2026, there have been a number of changes in economic factors including a decrease of 7% in the Energy Price Cap from 1 April 2026, meaning households will pay less for their energy use, while inflation reduced to 3% in the 12 months to January, down from 3.4% in December, with food inflation also falling to 3.6% from the 4.5% rate in December 2025. Elected members are asked to note that: • The rate of inflation is standing at 3% in January, falling from 3.4% 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 3.6% in January, down from 4.5% in December. It remains higher than overall inflation. • The Bank of England interest rate was held at 3.75% in February after cutting rates six times since August 2024. The next announcement is due on 19th March. • The Energy Price Cap, originally introduced by Ofgem in January 2019 to set limits on the underlying rates energy suppliers, is currently set at £1758 from 1 January, and will reduce to £1641 from 1 April. 1.3 This paper provides an overview of information collated by officers in relation to cost of living pressures, at both a national and local level where available.
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2 OFFICIAL 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 28 January 2026, 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 response to Ofgem’s Debt Relief Scheme reported that the number of people seeking their advice with energy debt has increased by 65% since 2019/20, and the overall quantum of debt people face is up by 130%. 3.4. In addition, data in the recent “Home Truths” report published by Citizens Advice Scotland on housing, indicates that the average rent debt held by private renters is just over £4,000, twice the average debt of social renters. The same report indicates a sharp increase in people coming forward for housing advice – a 9% increase between quarter 1 and quarter 2 2025/26. 3.5. The cost of essentials; food, fuel and housing remain high, and a significant worry for many families in Renfrewshire. 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 December to 4th January found that 88% of those surveyed reported the cost of living as the most important issue facing the UK today, the same as the November figure last reported to the Sub-Committee. Around 62% reported that their cost of living had increased compared with a month ago, a slight increase from the 61% last reported, with 36% stating it had remained the same.
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3 OFFICIAL 4.2. Among those who reported that their cost of living had increased compared with a month ago, the most commonly reported reasons were increases in the price of food shopping (94%), gas or electricity bills (68%) and the price of fuel (46%). 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: • Eating out less (58%), buying cheaper food (51%) and buying discounted food (38%) were the most commonly reported actions to save money on food because of the increased cost of living. In Scotland, eating fewer portions of fruit and veg as an action to save money was cited by 15%, more than Wales (10%) and England (12%). • Around one in three adults (34%) who pay energy bills reported finding it very or somewhat difficult to afford these bills; this was more common among adults in socially rented accommodation. • Around one in seven adults in Scotland (15%) reported they were occasionally, hardly ever, or never able to keep comfortably warm in their home in the past two weeks. This figure is less than the English figure (17%) and Welsh figure (20%); this was more common among unemployed adults and adults who rent their home. • In the period 1 October 2025 to 4 January 2026, around 1 in 30 (3%) adults reported that in the past two weeks they or their household had run out of food and could not afford to buy more. • In the period 1 October 2025 to 4 January 2026, among adults currently paying rent or mortgage payments, around 3 in 10 (31%) reported finding it very or somewhat difficult to afford these payments. • 34% of adults say they will not be able to save any money in the next 12 months, while 18% are unsure. 4.4. The ONS also found that 43% of people are shopping around more, with 39% spending less on food and essentials, 61% spending less on non-essentials, and 36% are using less fuel, such as gas or electricity in their homes. 4.5. 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 5.36%. This is the highest rate since records began in January 2019. 4.6. With regard to Electricity and Gas Direct Debits, the default rate is 3.42%, again the highest rate ever recorded since records began in 2019.
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4 OFFICIAL Energy Price Cap and Standing Charges 4.7. 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 26 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, however, will reduce by 7% to £1641 from 1 April 2026. 4.8. The table below shows the average unit rates per kilowatt hour (kWh) and standing charges per day under the new Price Cap from 1 April to 30June 2026: • Electricity unit rate: 24.67p/kWh (was 27.69p) down 10.9%. • Electricity Standing Charge: 57.21p/day (was 54.75p) up 4.5%. • Gas unit rates: 5.74p/kWh (was 5.93p) down 3.2%. • Gas Standing Charge: 29.09p/day (was 35.09p) down 17.1%. 4.9. Most existing fixed deals from energy suppliers will also fall broadly in line with the 7% reduction. This however is due to a change in policy costs. In last November's Autumn Budget, the UK Government announced it would reduce household energy bills by cutting some underlying structural costs – including reducing the amount households pay towards the 'Renewable Obligation' and ending the 'Energy Company Obligation' scheme. These changes will be factored into April's Price Cap and passed to those on a fixed energy deal. 4.10. In addition, the Government announced earlier this month that it would lower the cost of Standing Charges by shifting costs associated with the Warm Home Discount away from Standing Charges and on to energy unit rates instead. Standing Charges currently make up around £328 of the average annual energy bill. From April, this will fall slightly to £315. 5. Employment and Wages 5.1. According to the ONS, the Claimant Count in January 2026, which is taken from JobcentrePlus administration systems, for those claiming unemployment-related benefits in Renfrewshire is 3,210 people – 1,985 men and 1,225 women aged between 16 and 64. This is an increase from 3,185 last reported. The Renfrewshire unemployment rate of 2.7 % is less than the Scotland rate (3 %). 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.
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5 OFFICIAL 5.2. Nationally, the UK's unemployment rate has hit a near five-year high of 5.2%. For those aged 16- 24, the unemployment figure was 16.1%, the highest in more than a decade, according to the ONS. When announcing the figures on the 17th February, the ONS said the data showed "weak hiring activity" in the UK, but outlined that there are more people out of work that are now actively looking for jobs. For those in work, wages are still rising faster than prices, but the rate at which they're growing continued to slow. 5.3. Average weekly earnings were estimated at £735 for total earnings and £691 (excluding bonuses) for regular earnings in December 2025. The annual growth in employees' average regular earnings (excluding bonuses) was 4.2% in October to December 2025. This continues the reduction seen in annual growth rates over the last year. The last time it was lower than 4.2% was in November 2021 to January 2022, when it was 4.1%. Annual growth in total earnings (including bonuses) was 4.2% in October to December 2025. Again this continued the general reduction seen in annual growth rates over the last year. 5.4. Over the long term, average weekly earnings for both total and regular pay show a steady increase, with some minor dips. Average weekly earnings were estimated at £739 for total earnings and £687 for regular earnings in July 2025. 5.5. These increases are all above the rate of inflation and ONS figures for the UK show that from the period from October to December 2025, in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH)), annual regular pay growth was 0.5% in October to December 2025. Annual real total pay growth (using CPIH) was also 0.5% in October to December 2025. 5.6. Annual average regular earnings growth was 7.2% for the public sector in October to December 2025 and 3.4% for the private sector. Within the private sector wholesaling, retailing, hotels and restaurants sector remained the strongest in terms of annual growth at 5.1%.
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6 OFFICIAL 5.7. Median weekly earnings as reported to the Economy and Regeneration Policy Board on 20 January 2026 show average weekly earnings of £797 in 2025. 6. Benefits 6.1. The UK Government has announced the benefit rises that will take place in April 2026. Inflation- linked benefits and tax credits, such as Child Benefit, will rise by 3.8% from April 2026, in line with the annual increase in the Consumer Prices Index rate of inflation for September 2025. Universal Credit standard allowances will receive an additional uplift of 2.3% as specified in the Universal Credit Act 2025. The basic and new State Pensions will be uprated by 4.8% from April 2026, in line with the annual increase in the Average Weekly Earnings index for May–July 2025. 6.2. Due to the increase in line with CPI, and the additional uprating factor, in 2026/27 Universal Credit standard allowances will increase: • From £316.98 to £338.58 per month for single people aged under 25 • From £400.14 to £424.90 per month for single people aged 25 and over • From £497.55 to £528.34 per month for joint claimants both aged under 25 • From £628.10 to £666.97 per month for joint claimants both aged 25 and over 6.3. For state pension, the full rates for 2026/27 will be: • £241.30 per week for the new State Pension (for those reaching State Pension age on or after 6 April 2016) – up from £230.25 in 2025/26. • £184.90 per week for the basic State Pension (the core amount in the old State Pension system) – up from £176.45 in 2025/26. 6.4. Although their effect in any given year is usually not dramatic, uprating decisions and rules compound over time and have substantially changed the value of benefits, both in real terms and relative to earnings. A useful illustration of this provided by the House of Commons Library report of 1 December 2025 is the change in the real value of the basic State Pension compared with basic levels of unemployment support.
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7 OFFICIAL 6.5. Rates for these two benefits tracked against one another from their introduction until the 1970s. After that, the rates diverged as pensions were increased by a greater amount with the introduction of earnings links in the 1970s, and the more recent triple lock. Whereas unemployment benefit rates have shown a decades-long downward trend. Household Benefit Cap 6.6. A cap limiting the maximum amount working age households can receive in benefits was introduced in 2013. Although most benefits subject to capping go up with inflation, the cap remained frozen between 2016 and 2023. Since April 2023 the amount has been: • £22,020 for couples and lone parents outside greater London • £13,400 for single adults with no children outside greater London. 6.7. Although as previously reported to elected members, the 2 child limit will be removed from April, JRF in their report ‘UK Poverty 2026: The essential guide to understanding poverty in the UK’, state that the household benefit cap will reduce the positive impact of the lift, as there is still an absolute maximum amount that can be paid with regard to UK benefits. Scottish Benefits 6.8. Scottish Benefits will also be uprated by 3.8% from April 2026. This includes Best Start Foods and Job Start payment where uprating remains at the discretion of Ministers. The earnings limit for Carer Support Payment will also be increased to £204 per week in line with 16 hours work at the rate of the National Living Wage.
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8 OFFICIAL 7. Inflation, Food Costs and Foodbank use 7.1. Inflation reduced to 3% in the year to January 2026. This is down from 3.4% in December, although still above the 2% target rate. The main downward drivers for inflation are meat, motor fuel and airfares, although there were increases in hotel stays and takeaways. 7.2. The price of some staples came down slightly in the month to January, including butter, bread and cereals, however costs for food are still well above what they were 5 years ago.
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9 OFFICIAL 7.3. The Bank of England expects the inflation rate to fall further over the coming months. In a report published on 5 February 2026, the Bank said it expected inflation to hover at around 3% for the next two months, before dropping sharply to 2.1% in April. This would bring inflation very close to the Bank's target level of 2%. 7.4. Due to timings of the sub-committee, the Foodbank statistics last reported are the most current ones, as the current quarter does not end until 31 March. At this stage the full annual figure will be available, and can be reported to the next sub-committee along with analysis of the annual figures. 8. Interest and Mortgage Rates 8.1. On the 18th December 2025, the Bank of England cut its base interest rate to 3.75%. This rate was held at the most recent announcement on 5 February. If the economy and the outlook for inflation evolve as they expect, there should be scope for some further cuts to the Bank Rate this year, with some analysts expecting three more cuts this year, especially since the most recent inflation rate announcement. These cuts would bring the rate down to a ‘neutral’ level as inflation normalises. 8.2. Since the base rate was cut to 3.75% the average fixed rate mortgage rate has decreased and mortgage rates are predicted to fall further in early 2026, and according to some analysts, throughout 2026. Sharp falls in mortgage rates, however, aren’t expected as much of the predicted outlook for the base rate has already been priced into fixed rate mortgages – the cheapest 2-year fixed rate deals available are below the current base rate of 3.75%, reflecting expectations of further cuts. 8.3. Although rates offered are dependant on circumstances including the amount of deposit paid and value of property, there are currently mortgages available for 3.59% for a fixed term of 2 years. For 5-year fixed terms, for remortgages, the best rate is now 3.71%. As long as the Bank of England base rate remains stable, mortgage rates likely will too. 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. 9. Housing costs Rental Costs 9.1. Private rent prices in Renfrewshire were an average £828 per month in January 2026, down from an average of £832 in November 2025, however an increase of 4.4% from the £793 in January 2025. This was higher than the Scottish figure of 2.6%. 9.2. By how many bedrooms there are in a property, average monthly rents as of January 2026 in Renfrewshire/Inverclyde have shown a slight reduction from the previous report and were:
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10 OFFICIAL • One bedroom: £528 (from £528 in November 25) • Two bedrooms: £695 (from £696 in November 25) • Three bedrooms: £896 (from £899 in November 25) • Four or more bedrooms: £1,565 (from £1,577 in November 25) 9.3. Taking the data instead by property type, average rents, again slightly reduced, were: • Flats and maisonettes: £648 • Terraced properties: £827 • Semi-detached properties: £874 • Detached properties: £1,316 9.4. 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. While rents have reduced very slightly between November and January, the rate compared to the same time the previous year has increased. This means affordability is a growing constraint for renters. Home ownership 9.5. 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 £160,000 in December 2025, up from £153,000 in December 2025, but down from the £161,000 reported for October 25. This is less than the average house price in Scotland which was £191,000 in December 2025. In the year to December 2025, the average price for terraced properties in Renfrewshire rose by 6.4%, while the average price for flats increased by 2.8%.
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11 OFFICIAL 9.6. For each property type, average prices as of December 2025 in Renfrewshire were: • Detached properties: £361,000 (down from £362,000 last reported) • Semi-detached properties: £219,000 (down from the £221,000 last reported) • Terraced properties: £163,000 (down from the £164,000 last reported) • Flats and maisonettes: £103,000 (down from the £104,000 last reported) 9.7. The average price paid by first-time buyers was £131,000, which was 4.5% higher than the previous year’s figure of £125,000. For homes bought with a mortgage, the average house price was £174,000, again higher than the £166,000 paid in December 2024, although less than the Scottish average of £198,000. 9.8. According to Adzuna, a recruitment agency, the average salary for jobs advertised in Renfrewshire in January 2026 was £37,395. Salaries in Renfrewshire have gone up 7.9% year-on-year, while the average national change is 2.5%, although salaries have fluctuated throughout the year. 10. JRF Poverty in the UK report 2026 10.1. The Joseph Rowntree Foundation (JRF) report, ‘UK Poverty 2026: The essential guide to understanding poverty in the UK’, published in January 2026, examines the current state of poverty in the UK. The report found that more people are living in “very deep poverty” across the UK, categorised as households with an income less than 40% of the UK median. 10.2. 48% of households living in some form of poverty fell into the “very deep poverty” category, totalling 6.8 million people. This is highest absolute number and proportion on record. 10.3. The report also found that the food insecurity has also increased by 60% from 21/22 to 23/24, which the report attributes to high inflation rates for food produce alongside stagnation of
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12 OFFICIAL incomes. The report cites data from the Office of National Statistics in 2025 showing food and non-alcoholic beverage prices have increased by almost 40% since 2021. 10.4. Scotland’s poverty rate sits at slightly below the UK average, and the impact and prevalence of poverty for certain at-risk groups, detailed below, are all relevant in Scotland as in the rest of the UK. Poverty has a deeper impact on groups such as: • Children – although the removal of the 2-child limit is projected to reduce poverty for children • Disabled people - 28% of disabled people in the UK are living in poverty – 8% higher than the average. The gap is starker for disabled working age adults (33%, compared to the 17% average). • Carers - The poverty rate for carers is 5% over the national average, sitting at 25%. • Minority ethnic groups - Asian and Asian British households experience poverty rates of 38%. The rate is highest in South Asian families, specifically Pakistani (49%) and Bangladeshi families (53%). Black British families had a poverty rate of 39%. Comparably, for white families the rate is 18%. 10.5. The report also highlights that although work has historically been a protective factor against poverty, this is becoming less relevant, with in-work poverty becoming more prevalent particularly for self-employed people. At the time that this report was written, the rates of poverty were as follows for the main economic groups: full-time employed (8%); part-time employed (22%); full-time self-employed (22%); part-time self-employed (28%). 10.6. Unemployment does, however, still carry the most risk of poverty with 53% of those out of work but able in poverty, alongside 37% of those who are economically inactive. 11. Current and potential cost-of-living increases due to the Iran War 11.1. The US-Israeli war with Iran has already had an impact on people's finances in the UK. Petrol and diesel prices have risen since 28 February. By 9 March, average petrol prices had increased by 4.95p to 137.78p a litre, while diesel had increased by 9.43p to 151.81p, according to the RAC motoring organisation which tracks prices at the pump. The chart below shows figures for the 10th March.
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13 OFFICIAL 11.2. As reported above, it had been anticipated that there would be a steady fall in interest rates charged on new, fixed mortgages, as well as lower variable rates. This was because the Bank of England base rate was expected to reduce as inflation fell. However due to increased economic uncertainty and the prospect of inflation rates rising, traders now consider it more likely that the Bank of England will raise the base rate, or not go ahead with cutting it as had previously been expected. That means that for those who are taking out a mortgage, or renting from a landlord who has one, in the next few years, there will likely be increased costs to borrowers. 11.3. According to Moneyfacts, on 9 March, 330 residential mortgage products were withdrawn from the market across eight different lenders, with the expectation of repricing them at a higher level. 11.4. While there is some protection in place for household gas and electricity bills thanks to the price cap set by energy regulator Ofgem, this is time bound and does not cover everybody. What happens now and until late May on the wholesale energy market will determine the new price cap from 1 July and a sustained period of high wholesale costs could potentially mean a sharp increase in energy prices. Some energy companies have pulled their fixed rate energy deals, or have now set them at a higher price. Geopolitical uncertainty also means there are likely to be fewer deals with a longer duration. 11.5. The most immediate impact of rising prices is felt by those who use heating oil. Around 130,000 homes in Scotland use heating oil, including some Renfrewshire residents in more rural areas and villages. There is no cap that limits the cost of heating oil and in some cases a doubling of prices has been reported in the national press as well as difficulty in obtaining deliveries. A £53 million support package was announced by the UK government on the 16th March 2026, with £4.6 million of this directed to Scotland. There are no details yet on the detail of how this will be distributed in Scotland. 11.6. Analysts expect inflation to rise, and food costs to increase as products we buy depend on oil and gas to be made, grown or transported to us. They do not, however, think inflation will return to the peak of 11.1% seen in the UK in October 2022. That is because the war in Ukraine also caused spikes in the prices of basic foodstuffs, such as wheat and edible oil, owing to the role of Ukraine in producing those items. This is not the case in the current conflict. 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
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14 OFFICIAL 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