1. FRSC COL Update Jun 26 v2
Renfrewshire Council · 3 June 2026
Back to Fairer Renfrewshire Sub-committee — 3 June 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
1 PUBLIC ________________________________________________________________________ To: Fairer Renfrewshire Sub-Committee On: 3 June 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 25 March 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 are currently paying less for their energy use, although this is expected to rise on 1 July, while inflation decreased to 2.8% in the 12 months to April, down from 3.3% in March, with food inflation also decreasing to 3% from the 3.7% rate in March. Elected members are asked to note that: • The rate of inflation is standing at 2.8% in April, down from 3.3% 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% in April, down from 3.7% in March. It remains higher than overall inflation and is forecast to rise further. • The Bank of England interest rate was held at 3.75% in April due to the conflict in the Middle East and associated inflation rises. The next announcement is due on 18 June. • The Energy Price Cap, originally introduced by Ofgem in January 2019 to set limits on the underlying rates energy suppliers, is currently set at £1,641 from 1 April, although this is forecast to increase to approximately £1,830 on 1 July. 1.3 This paper provides an overview of information collated by officers in relation at both a national and local level where available.
Page 2
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 25 March 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. UK inflation, as measured by the consumer prices index (CPI), rose to 3.3% in the year to March - up from 3% in the 12 months to February - after the conflict in the Middle East caused the largest jump in petrol and diesel prices in more than three years. It then fell to 2.8% in April due to the lower gas and energy bills under the UK Government’s energy bill support package. Inflation and energy prices are expected to rise however, and inflation could peak about 3.5% to 4% this year, economists have predicted, with food inflation potentially reaching 9%. 3.3. 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 February 2026 (a survey by YouGov of 1210 Scottish Adults) found that 33% were worried about household finances and 39% about the cost of groceries, while 29% were worried about energy/fuel prices. 64% agreed either strongly (18%) or generally 46% that the cost of living would have a long term negative impact on their family. Only 9% agreed that the cost of living crisis is easing, with only 1% strongly agreeing this. It should be noted that these figures were collected prior to the conflict in the middle East and associated price increases. 3.4. Households are struggling to pay bills and pay off debts and the Citizens Advice Scotland Energy Brief of February 2026 reports an increase in demand for energy advice over autumn and winter. From October to December 2025, 9,300 people approached Renfrewshire CAB in need of energy support. Of those, 1,200 came for energy debt support and the level of energy debt seen by advisers across the Scottish Citizens Advice network during that quarter remains high at over £2,300, rising to £2,800 in rural areas. Of the people who needed support with an energy debt, 68% were disabled. 3.5. Increased fuel and energy prices are expected to be joined by rising food costs later this year, as the disruption to shipping routes and the flow of fuel around the world spreads through to the wider economy. These rising energy and fuel costs, driven by geopolitical tensions, are likely to further constrain living standards. Research by the Resolution Foundation highlights a worsening outlook for living standards among low-income groups.
Page 3
3 PUBLIC 3.6. Living standards in the UK were expected to rise in 2026–27, with typical working-age families gaining about 0.9% (£300) and lower-income households rising 3.9% (£800) due to benefit increases and the removal of the two-child limit. In a Resolution Foundation analysis on the impact of the Middle East conflict, it was suggested that a related energy price shock could increase inflation and add about £500 to annual energy bills, hitting poorer families hardest. 3.7. The cost of essentials; food, fuel and housing remain high, and with uncertainty over the Middle East and the potential for these to costs to increase further cost of living remains 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 4th March to 29th March found that 89% of those surveyed reported the cost of living as the most important issue facing the UK today, an increase of 1% on the January figure last reported to the Sub-Committee and around two-thirds (67%) of adults reported that their cost of living had increased compared with a month ago, which is up from 56% in February 2026. 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 (91%); the proportion reporting the price of fuel (75%) as a reason for increased living costs increased from February 2026, when it was 38%. The proportion reporting energy bills as a reason for increased cost of living was 63%, a decrease from the 68% 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. This was more common among adults who are unemployed (59%), compared with those who are employed (34%). • 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 3 in 10 (30%) reported finding it very or somewhat difficult to afford these payments. • Around 1 in 20 (5%) adults reported they had been unable to pay a direct debit, standing order, or bill in the past month, which is the same as this time last year.
Page 4
4 PUBLIC 4.4. The ONS also publishes statistics for the UK on Direct Debit failure. The most recent statistics for March 2026 show a default rate on loans of 5.41%. This is the highest rate since records began in January 2019 and is higher than the last reported rate for November 2025, when it was 5.36% 4.5. With regard to Electricity and Gas Direct Debits, the default rate is 2.92%, a reduction from the 3.42% last reported. 4.6. 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. 49% of people spent less on non-essential items or activities, 35 % used savings and 17% cut back on essential items such as food. 11% borrowed or used credit and 40% took steps to use less energy in the home, for example less heating, lighting or hot water. 21% got rid of an expense such as internet, a mobile or television package. 3% got items from a foodbank. 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 April 26 and 30 June 2026, the energy price cap is set at £1,641 per year for a typical household who use electricity and gas and pay by Direct Debit. This figure, however, is expected to rise from 1 July. Cornwall Insight, an energy consultancy, predicts the cap will increase to £1,843 a year for a typical household - up by more than 12%, or roughly £200. 4.8. One of the reasons diesel and energy costs are being affected so much is because of the closure of the Strait of Hormuz. Although the UK gets very little of its gas from the region, the squeeze on supply has pushed up the international price of both oil and gas, and the higher wholesale gas prices faced by energy suppliers ultimately feed through to gas and electricity bills in UK homes. 4.9. 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 estimated Price Cap (Cornwall Insight) from 1 July for a dual fuel, direct debit customer: 1 April 2026 1 July 2026 Electricity Unit Rate 24.67p/kWh 26.22p/kWh Elec Standing Charge 57.21p/day 59p/day Gas unit rates 5.74p/kWh 7.04p kWh Gas Standing Charge 29.09p/day 30p/day
Page 5
5 PUBLIC 4.10. The Citizens Advice Scotland Energy Brief of February 2026 reports an increase in demand for energy advice over autumn and winter. From October to December, 9,300 people came to local CAB in need of energy support. Of those 1,200 came for energy debt support and the level of energy debt seen by advisers across the Scottish Citizens Advice network during that quarter remains high at over £2,300, rising to £2,800 in rural areas. Of the people who needed support with an energy debt, 68% were disabled and almost 3,200 people needed support with fuel vouchers. 4.11. Renfrewshire’s Energy Management Unit also provide fuel vouchers. For 2026 so far, 136 vouchers have been issued, helping 158 adults and 61 children. They have found that most of their clients are struggling with high costs of living, which leave them unable to fully meet energy costs. 4.12. They have found that the biggest issue for clients is that the annual cost for heating and lighting a typical 2-bedroom home in the UK is approximately £1,200–£1,400 per year, which breaks down to roughly £100–£117 per month. While those with pre-payment meters can get help through vouchers, the EMU team are finding that clients who pay for their fuel by direct debit are not budgeting enough for the cost of their fuel, which then leads to debt. They too have found that clients can have significant levels of debt, and as was reported to elected members by RCAB at the last Sub-Committee meeting, issues are becoming more complex. 5. Fuel Costs 5.1. Fuel prices have surged since the conflict in the Middle East began. Although as announcements have been made, such as those around ceasefires, prices have fluctuated, they have been consistently at a higher level since 28 February 2026. 5.2. According to the Uk Government’s Weekly Road Fuel Prices statistics, the cost of diesel has risen 35% in nearly 2 months and the cost of petrol by 19%. In real terms the cost of filling a typical family car with petrol has gone up by about £14. A tank of diesel is about £27 more expensive. On 19 May, the average price of unleaded petrol has risen to 158.52p a litre, its highest level since the start of the Iran conflict, according to the RAC. 5.3. The RAC chart below shows how prices have changed.
Page 6
6 PUBLIC 5.4. These rising fuel costs directly contribute to higher costs for families who have a petrol or diesel vehicle. These households face reduced disposable income as a greater percentage of budget is spent on fuel. Fuel costs also affect food supply chains, as transportation and distribution costs increase, ultimately causing higher food prices, which again have a knock-on effect on households. 6. Employment and Wages 6.1. According to the ONS, the Claimant Count in March 2026, which is taken from JobcentrePlus administration systems, for those claiming unemployment-related benefits in Renfrewshire is 3445 people – 2075 men and 1370 women aged between 16 and 64. This is an increase from 3,210 last reported. The Renfrewshire unemployment rate of 2.9% is less than the Scotland rate (3.1%). 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. Nationally, the UK's unemployment rate reduced slightly from the near five-year high of 5.2% to 4.9% to February 2026. For those aged 16-24, the unemployment figure was 15.8%, also slightly reduced according to the ONS. 6.4. Average weekly earnings were estimated at £745 for total earnings and £692 (excluding bonuses) for regular earnings in February 2026. The annual growth in employees' average regular earnings (excluding bonuses) was 3.6% in December 25 to February 26. This continues the reduction seen in annual growth rates over the last year. Annual growth in total earnings (including bonuses) was 3.8% in December 25 to February 26. Again this continued the general reduction seen in annual growth rates over the last year. 6.5. Over the long term, average weekly earnings for both total and regular pay show a steady increase, with some minor dips.
Page 7
7 PUBLIC 6.6. These increases are just above the rate of inflation and ONS figures for the UK show that from the period from December 25 to February 2026, annual growth in real terms, adjusted for inflation using the Consumer Prices Index including owner occupiers’ housing costs (CPIH), was 0.2% for regular pay and 0.4% for total pay. 6.7. Annual average regular earnings growth was 5.2% for the public sector in December 25 to February 26 and 3.2% for the private sector. Within the private sector wholesaling, retailing, hotels and restaurants sector remained the strongest in terms of annual growth. 7. Inflation, Food Costs and Foodbank use 7.1. Inflation increased to 3.3% in the year to March. This was up from 3% in February. The main upward driver for inflation has been the rise in cost of fuel due to the war in the Middle East, with food costs and travel fares also expected to increase. The figure for April, however, showed a reduction to 2.8%, due to lower gas and electricity bills because of the energy bill support from the UK government. 7.2. The conflict in the Middle East, however, is expected to lead to higher UK inflation and analysts expect inflation to rise and reach about 4% by the end of the year, as the conflict continues to add pressure on global prices. Prior to the conflict the CPI annual inflation rate was expected to fall to around 2% from April and remain around 2% for the rest of 2026. On 19 March 2026, the Bank of England said, based on preliminary estimates, that CPI is now likely to be between 3% and 3.5% in second and third quarters of 2026, due to higher energy prices. 7.3. Food inflation was 3.7% in March, up from 3.3% in February, then reduced to 3% in April. A slower rate of price increases for food - particularly chocolate and meat products - added to the downward pressure on inflation for April. The food industry and supermarkets, however, are
Page 8
8 PUBLIC energy-intensive industries, which mean that they face risk from higher energy costs, which are expected to push the price of food up. The chart below from the Food Foundation shows food the relationship between food and general inflation since 2021. 7.4. The conflict in the Middle East and the associated rise in energy prices is expected to lead to higher UK inflation. Prior to the conflict the CPI annual inflation rate was expected to fall to around 2% from April and remain around 2% for the rest of 2026. On 19 March 2026, the Bank of England said, based on preliminary estimates, that CPI is now likely to be between 3% and 3.5% in second and third quarters of 2026, due to higher energy prices. 7.5. Food inflation was 3.7% in March, up from 3.3% in February. The food industry and supermarkets are energy-intensive industries, which mean that they face risk from higher energy costs, pushing the price of food up. The chart below from the Food Foundation shows food the relationship between food and general inflation since 2021. 7.6. 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 woman’s basket of food now costing £52.98 per week, with the male basket costing £59.38 per week, an increase since April 2022 of 29.2% and 36.4% respectively. 7.7. While it is too early to attribute any specific price movement to the current conflict in the Middle East, the Food Foundation states that historical data suggests this geopolitical instability is expected to translate into food prices. 7.8. The UN’s Food and Agriculture Organisation reported a 2.4% rise in its global commodity index in March 2026, with vegetable oil and sugar seeing the sharpest rises. The conflict has pushed up
Page 9
9 PUBLIC energy prices that feed directly into the cost of moving, processing and producing food, with around a third of global fertiliser production travelling through the Strait of Hormuz, UN projections indicate that global prices could average 15% to 20% higher in the first half of 2026 if crisis persists. 7.9. In the UK, the Food and Drink Federation, has revised its food inflation forecast in light of recent geopolitical events. Previously, the FDF forecast that the rate of food inflation would gradually ease in 2026, ending the year on around 3%. However, given the closure of the Strait of Hormuz and impact on oil and gas facilities in the Middle East, they now anticipate that food inflation will reach 9% by the end of the year. Renfrewshire Foodbank 7.10. Foodbank statistics for the year have now been received, with 7399 vouchers fulfilled within 25/26. This is a slight decrease of 5.91% on the number of vouchers last year. The rising cost of essentials was cited in 2053 cases as the reason for voucher issue, with other unexpected expense accounting for 731 vouchers and non-priority debt for 601. It should be noted that more than one reason can be provided. Benefit delays were cited in 496 cases. 7.11. Paisley Northwest accounted for 1706 vouchers, with Renfrew South and Gallowhill, accounting for 596. Lowest demand for vouchers came from Bishopton, Bridge of Weir and Langbank at 62. The only ward to show an increase in vouchers this year was Erskine and Inchinnan, with 75 in comparison to 66 last year. All other Wards have shown a decrease in vouchers issued. Single adult households accounted for 2811 vouchers, and those for whom benefits was their only income accounted for 4199. 7.12. This reflects recent discussions with Renfrewshire Foodbank, who recognised that single people, especially single males who have only benefits for income, made up the vast majority of Foodbank users. It is suggested that this may be because recent changes in policy around benefits, including, for example, Scottish Child payments and removal of the 2 child cap, benefit families only. 7.13. Some comparisons between this year’s figures and last are in the tables below. 2024/25 2025/26 % change Number of vouchers fulfilled 5411 5091 -5.91 Number of adults receiving assistance 7075 6662 -5.83 Number of children receiving assistance 3409 3381 -0.82 Single adult with no children receiving voucher 2988 2811 -5.92 Reason for voucher ‘rising costs of essentials’ 2510 2053 -18.2% Source of Income ‘benefits only’ 4405 4199 -4.67% Top 3 Wards for Vouchers 24/25 No of vouchers 25/26 No of vouchers Paisley Northwest 1706 Paisley Northwest 1592
Page 10
10 PUBLIC Renfrew South and Gallowhill 596 Renfrew South and Gallowhill 587 Renfrew North and Braehead 485 Paisley Southwest 457 Top 3 reasons for voucher issue 25/25 25/26 Rising Cost of essentials 2510 Rising Cost of essentials 2053 Debt (priority and non priority) 1115 Debt (priority and non priority) 1055 Ongoing impact of physical or mental health condition 697 Other unexpected expense 731 8. Interest and Mortgage Rates 8.1. On the 30 April, the Bank of England held its base interest rate at 3.75%. The bank stated that due to the war in the Middle East disrupting the transportation and supply of energy and raising its price, households’ fuel and utility prices, and companies’ costs, will be pushed up. Because of this inflation will be higher than expected, at least in the short term and it considers that the impact will be greater the longer the conflict and its effect on the global energy supply goes on. The Governor of the Bank stated "Inflation is bad for everybody, but it's particularly bad for the least well off. Things like energy and food are a much bigger proportion of spending by those on lower incomes... so this is a difficult situation." 8.2. The Bank is monitoring the situation closely and must still consider what changes can be made to interest rates that achieve the 2% inflation target sustainably. With the situation within the Middle East so volatile, forecasts are difficult to make, however there is no expectation that interest rates will fall in the near future, keeping mortgage interest rates too at a higher level for those borrowing with. Indeed, the Bank of England indicated they would ‘act forcefully’ should oil prices hit a peak of $130 a barrel and remain high (the current price is $126 a barrel). 8.3. This outlook is different from that previously reported to elected members, where prior to the war, inflation and interest rates were falling, and mortgage rate predictions for 2026 broadly expected mortgage rates would gently trend down over the year. Instead, mortgage rates have risen, with the average 5 year fixed rate now 5.75%, up from 4.95% before the conflict started, and the average 2 year fixed rate is now 5.84%, up from 4.83%, according to finance site Moneyfacts. 8.4. 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 a, in some cases, significant increase in housing costs for those householders. 9. Housing costs
Page 11
11 PUBLIC Rental Costs 9.1. Private rent prices in Renfrewshire were an average £826 in March 2026, down from an average of £ 828 in January 2026, however an increase of 3.2% from the £802 in March 2025. This was higher than the Scottish figure of 2.1% over the year. 9.2. By how many bedrooms there are in a property, average rents as of January 2026 in Renfrewshire/Inverclyde have shown a slight reduction from the previous report, apart from for larger homes and were: • One bedroom: £527 (from £528 in January 26) • Two bedrooms: £694 (from £695 in January 25) • Three bedrooms: £894 (from £896 in January 25) • Four or more bedrooms: £1,567 (from £1,565 in January 25) 9.3. Taking the data instead by property type, average rents, again slightly reduced in all types, were: • Flats and maisonettes: £647 • Terraced properties: £826 • Semi-detached properties: £871 • Detached properties: £1,304 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 to March 2026, the rate compared to the same time the previous year has increased. This means affordability is a growing constraint for renters. Home ownership
Page 12
12 PUBLIC 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 February 2026 up 6.9% from February 2025, with the average price for a home bought with a mortgage also increasing 6.9% to £173,000. 9.6. For each property type, average prices as of February 2026 in Renfrewshire were: • Detached properties: £353,000 (down from £361,000 last reported) • Semi-detached properties: £219,000 (the same as £219,000 last reported) • Terraced properties: £163,000 (the same as £163,000 last reported) • Flats and maisonettes: £103,000 (the same as £103,000 last reported) 9.7. The average price paid by first-time buyers was £130,000, which was 7.2% higher than the previous year’s figure of £122,000. 9.8. According to the UK House Price Index, typical payments on a 5 year fixed mortgage for an average flat in Renfrewshire is £388 with a deposit of £30,000 and a 25 year mortgage. The average price for a flat property in Renfrewshire is £103,000 in Feb 2026. This has increased by 25% since Feb 2021. The average price for a terraced property in Renfrewshire is £163,000 in February 2026, having increased 35% since February 2021. Typical payments on a 5 year fixed mortgage for an average terraced property in Renfrewshire are £727 with a deposit of £30,000 and a 25 year mortgage. Semi detached home prices have also increased 35% since 2021, up to £219,000 and mortgage payments up to £1029 a month. Detached homes have risen by 30% to £353,000. 9.9. According to Adzuna, a recruitment agency, the average salary for jobs advertised in Renfrewshire in April 2026 was £36,564. Salaries in Renfrewshire have gone down 1.9% year-on-year, while the average national change is 3.7%, although salaries have fluctuated throughout the year.
Page 13
13 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