Tag: cost of living crisis

Ofgem: Further reduction but ‘winter will be tough’

‘MANY FAMILIES WILL STILL STRUGGLE’

Energy regulator Ofgem has today (Friday, 25 August, 2023) announced a further reduction in the energy price cap for the last quarter of 2023 (Oct to Dec).     

The change will bring the average dual-fuel energy bill below £2,000 a year for the first time since April 2022, saving households an average of £151 on the previous quarter.   

From 1 October – 31 December, the cap will be set at an annual level of £1,923 for a dual fuel household paying by direct debit based on the current typical domestic consumption values (TDCV) rate. 

 Direct Debit Prepayment Standard Credit Economy 7 (electricity only Direct Debit) 
July – Sept 2023 cap £2,074 £2,077 £2,211 £1,400 
Oct – Dec 2023 cap £1,923 £1,949 £2,052 £1,298 

The drop, the lowest level since October 2021, reflects further falls in wholesale energy prices, as the market stabilises and suppliers return to a healthier financial position after four years of loss making.   

Ofgem is clear that it expects all suppliers to continue improving customer service, to support their most vulnerable customers and to shore up their financial resilience to prevent the kind of failures we saw two years ago. Ofgem recognises that there is some excellent best practice across the sector but expects this to be the norm with poor practice stamped out. 

Alongside changes to the price cap, Ofgem has also introduced measures to reduce costs for prepayment meter customers and ensure extra support for those facing disconnection from the network.   

The price cap savings – which can be passed on more quickly to customers thanks to the price cap updating quarterly – continues the downward trend since prices peaked at £4,279. However, it remains well above the average before the energy crisis took hold in 2021 and the market remains volatile.   

Jonathan Brearley, Ofgem CEO, said: “It is welcome news that the price cap continues to fall, however, we know people are struggling with the wider cost of living challenges and I can’t offer any certainty that things will ease this winter. 

“That’s why we’ve introduced new measures to support consumers including reducing costs for those on pre-payment meters, and introducing a PPM code of conduct that all suppliers need to meet before they restart installation of any mandatory PPMs.   

“There are signs that the financial outlook for suppliers is stabilising and reasonable profits are returning. With the small additional allowance we’ve made to Earnings Before Interest and Tax (EBIT), this means there should be no excuses for suppliers not to be doing all they can to support their customers this winter, and to reinforce this we’ll be introducing a consumer code of conduct which we will look to have in place by winter.

“This code will ensure there are clear expectations of supplier behaviours especially for their most vulnerable consumers with whom suppliers should be reaching out proactively, with compassion and understanding. There are great examples of suppliers already doing this but I want to see this become the norm in such an essential sector that has such a big impact on people’s lives.” 

Ofgem understands that while suppliers cannot control wholesale prices or fix the wider cost of living pressures hitting their customers, now the market has stabilised, they must continue improving customer service and ensure that support across the board is accessible, responsive and understanding, including giving time to make pay arrangements and directing customers to further support and advice. They must also invest in strengthening their financial resilience to protect consumers against the cost of supplier failure. 

Additionally, while still low by pre-crisis levels, we are starting to see more and more competitive fixed deals coming onto the market and levels of switching are slowly increasing.

With a lower price cap and reasonable profits starting to return, there is an opportunity for this to continue to grow. Anyone considering fixing should weigh up all the facts and consider what is most important to them, whether that’s the lowest price, or the certainty of knowing exactly what they will pay each month.

It’s important customers are comparing fixed deals with the new, lower price cap announced today. Suppliers are expected to ensure they are transparent in releasing all tariff information to enable consumers to make simple comparisons of the deals available to them across the market.  

While the price cap has protected households from the full extent of volatility and surges in wholesale prices over the last two years, it was originally introduced by the Government to protect the minority of consumers who did not switch rather than to cover the vast majority of consumers, as it does now.

It is a blunt tool and in the current market it has costs and as well as benefit. It’s important to look at alternative models to examine whether they could work better with the current volatile market and the move to net zero. 

 Ofgem has also today published:    

  1. A Final Decision to raise the Earnings Before Interest and Tax (EBIT) allowance by £10 per customer per year. Most of this increase is to cover Renewable Obligations ringfencing so that customers’ money is protected in the event of a supplier failure. 
  2. Removal of the temporary RO ringfencing allowance, worth £8 per customer and covered by the additional EBIT costs above  
  3. A new sliding scale for EBIT meaning if prices surge, the EBIT allowance reduces as a percentage preventing suppliers from making excessive cash gains from a high price market  
  4. Final decision on the allowance for additional support credit (ASC) bad debt costs – a new allowance to help ensure some of the most vulnerable consumers remain on supply this winter  
  5. Implementation of UNC840 in the cap, reducing the PPM premium  
  6. Price Cap model technical changes Final Decision  
  7. Levelisation Policy Consultation  

By raising the EBIT allowance, Ofgem is taking the next step in its drive to make the retail energy sector more resilient, as we move into another difficult winter when price volatility remains a risk.  

At the height of the energy crisis around 30 suppliers failed because they did not have enough capital in the reserve to stay in business – and the cost was shared among all energy consumers, adding £83 to bills.  

With suppliers only now starting to recoup a portion of their multi-billion pound losses over the past four years, a small increase in permitted profit margins will allow companies to better cover their costs, attract investment and retain financial stability protecting consumers into the future.  

Raising the EBIT allowance from its current rate of 1.9% to 2.4% from 1 October will involve an average £10 increase in bills per year. £8 of this will cover costs to consumers incurred by an additional requirement of suppliers to ringfence enough funds to cover their Renewable Obligations, protecting consumers from additional costs should a supplier go bust.    

The EBIT rate, which is well within international norms for energy retail profits and lower than most other business sectors in Britain, will also be altered from a ‘flat rate’ to a more flexible model that tracks the price cap level and tapers as low as 1.75% in the event of another price surge in the wholesale market. This would prevent suppliers from making excessive cash profits in a high-cost market. 

Strengthening the commitment to supporting struggling and vulnerable consumers, Ofgem is also reducing the cap for prepayment meter (PPM) customers by £51 per year through an updated approach to calculating the costs of unidentified gas, approved in April this year.  

Using some of the benefit from this change, the regulator is now able to introduce an initial 12-month allowance to cover increased debt costs associated with Additional Support Credit that is offered to PPM customers, often at the point of disconnection. This new allowance will help ensure some of the most vulnerable consumers remain on supply this winter.   

Longer term, Ofgem seeks to permanently end the PPM premium, where prepayment customers are charged more than those who pay by direct debit to cover the additional costs and resources required by suppliers to provide energy via PPM. A consultation is underway with an aim to ‘levelise’ these standing charges by April 2024 to coincide with the end of government support currently in place via the Energy Price Guarantee.  

Morgan Vine, Head of Policy and Influencing at Independent Age said: “Today’s Price Cap announcement offers little comfort to older people living on a low income and struggling to get by.

“Our helpline is continuing to hear from people in later life in financial hardship who have been forced to make sacrifices to pay their bills, including eating one meal a day, washing themselves in freezing cold water, and risking falls by not turning on the lights at night.  

“Gas unit costs are still well over double what they were in winter 2020/21 and electricity unit costs are up by over half. The fixed incomes of older people in financial hardship simply cannot keep up with these increases. Long term solutions to protect the most financially vulnerable from high energy prices are desperately needed. 

“We’re calling on the government to introduce an energy bills social tariff for those in greatest needed, including people over 65 on a low income and those who have high energy consumption due to illness.

“This long term and sustainable solution would offer some protection to people in later life living on low incomes, so they aren’t forced to make dangerous choices now, and as we approach the winter. “

The next quarterly price cap announcement will be in November 2023, covering January – March 2024.   

BPS supports Essentials Guarantee

BPS SUPPORTS CAMPAIGN TO MAKE UNIVERSAL CREDIT ENOUGH FOR PEOPLE TO AFFORD TO COVER ESSENTIALS

The British Psychological Society has joined the Joseph Rowntree Foundation (JRF), the Trussell Trust, and other leading health and care organisations and charities to call for an “Essentials Guarantee”, a new law to make sure Universal Credit’s basic rate is always at least enough for people to afford the essentials. 

The organisations are warning that so many people are routinely going without the essentials it poses a serious risk to the UK’s health.

Together, they have written to the Prime Minister to express their worry that, as the high prices of everyday essentials like food and housing persist, too many people are expected to live with what can be devastating knock-on consequences. 

JRF’s own analysis shows the weekly Universal Credit standard allowance is £35 less than the cost of essential items for a single person, contributing to millions of people forced to use food banks because they can’t make ends meet.

Dr Roman Raczka, President-Elect of the British Psychological Society, and Chair of its Division for Clinical Psychology, said: “Nobody should be in a position of being unable to afford the essentials they and their families need to sustain their health and wellbeing, and it’s clear the current level of Universal Credit falls woefully short.  

“Poverty is one of the major risk factors for the development of physical and mental health problems, and we know that children growing up in poverty are three-to-four times more likely to develop mental health problems, which also leads to long-term impacts upon their education, life chances and quality of life.

“If the government is truly committed to preventing health inequalities from widening further, tackling poverty, and reducing pressure on our already stretched and underfunded public services, it must commit to the Essentials Guarantee to protect this generation, and generations to come.”

About the Essentials Guarantee

The Essentials Guarantee would embed in our social security system the widely supported principle that, at a minimum, Universal Credit should protect people from going without essentials.

Developed in line with public attitude insights and focus groups, this policy would enshrine in legislation:

  1. an independent process to regularly determine the Essentials Guarantee level, based on the cost of essentials (such as food, utilities and vital household items) for the adults in a household (excluding rent and council tax);
  2. that Universal Credit’s standard allowance must at least meet this level; and
  3. that deductions (such as debt repayments to government, or as a result of the benefit cap) can never pull support below this level.

The UK Government would be required to set the level of the Essentials Guarantee at least annually, based on the recommendation of the independent process. JRF analysis indicates that it would need to be at least around £120 a week for a single adult and £200 for a couple.

Back to School: 87% of parents in Edinburgh are spending less on themselves to save for school uniform

The back-to-school period can be a stressful time for parents and carers, and the current cost-of-living crisis is only set to add to this stress.

Looking to understand the situation parents face this month, UK affordable footwear retailer, Wynsors, has used the rate of inflation to estimate that families face paying 20% more for school uniform than they did back in 2018.

With that in mind, Wynsors has carried out a new survey of more than 1,000 UK parents to understand exactly how much this increased cost of school uniform is affecting their finances.

The results do not paint a positive picture for households across Edinburgh:

  • Over 3 in 5 parents (70%) in Edinburgh agree that the cost of buying school uniform and supplies puts a strain on their household budget.
  • Nearly half of parents in Edinburgh (45%) agree that abolishing school uniforms would help to save money.
  • 76% of parents in Edinburgh do not receive any financial support with the cost of new school uniform, and are the least likely to receive any financial help from family members.

With parents spending an estimated £230.40 on average to buy a full set of new school uniform in 2023, households across Edinburgh are having to make cutbacks elsewhere to afford the cost.

More than 3 in 4 parents in Edinburgh (87%) are spending less on new things for themselves (such as clothing) so they can stretch their household budget to cover the cost of buying new school uniform, the highest when compared with other cities in the UK, and 1 in 4 (26%) only buy school supplies and uniform when discounted to do so.

Adam Foster, Retail Director from Wynsors, comments: “As highlighted by this research, the back-to-school period is often a stressful time, but as the UK’s most affordable family footwear retailer, we want to take the stress out of the shopping experience by making school uniform accessible to all.

“From our low prices to our friendly in-store staff, we pride ourselves on helping parents over the last 50 years to get their kids equipped and ready for school.”

The full study, including more information on parents’ attitudes to school uniform and tips for saving money on the back-to-school shop, can be found on-site here: 

https://www.wynsors.com/blog/true-cost-of-school-uniform/

Millions left teetering on a financial cliff-edge during the cost of living crisis, says Which?

Almost 8 million people have been overlooked during the cost of living crisis and are now on the brink of serious hardship, Which? is warning.

It comes as new research by the consumer champion identifies 15 per cent of the UK population who are more likely to have turned to credit and buy now pay later schemes (BNPL) during the crisis. These people are at risk of significant financial and mental harm in the months and years ahead as interest rates continue to rise.

Which? surveyed 4,000 people across the UK to find out how different groups of consumers are coping –  financially, physically and mentally – with the cost of living crisis. The research highlights that while the vast majority of consumers have been affected by the cost of living crisis, this pain is not felt equally.

The study identified six distinct groups of consumers who are experiencing the cost of living crisis in different ways. These groups are: ‘Drained and Desperate’, ‘Anxious and At Risk’, ‘Cut Off By Cut Backs’, ‘Fretting About the Future’, ‘Looking out for Loved Ones’ and ‘Affluent and Apathetic’.

While much of the government and policymakers’ focus has rightly been on supporting the ‘Drained and Desperate’ group – who are more likely to have household incomes of less than £20,000 and have already had to make severe financial cutbacks, such as skipping meals and not turning on the heating.

Outside of any universal support available like the government’s support for energy bills, this ‘Anxious and At Risk’ category has been largely overlooked.

The ‘Anxious and At Risk’ group contains 7.9 million adults – 15 per cent of the UK population. They tend to be from larger households with children at home and are struggling financially but have just managed to keep afloat by using credit.

However, unlike the ‘Drained and Desperate’ group, they are much more likely to have borrowed money to maintain basic living standards than to have cut back on essentials, such as food and energy.

Six in ten (59%) have increased their debt in the last six months – the highest amongst all groups.They are also more than twice as likely (36%) as the UK population (14%) to have used buy now pay later schemes.

With interest rates continuing to rise, it is only a matter of time before this group is unable to keep up this cycle of borrowing and fall into financial difficulty.

One woman from northern England in this ‘Anxious and At Risk’ group said: “I have to use credit to make ends meet and I worry about debt. I have no safety net for emergencies and I will have to work past state pension age.”

Four in 10 (38%) of this group have a mortgage or loan on their home and worryingly, one fifth (21%) of those with a mortgage are on a variable tracker mortgage – meaning their rates are hiked every time the Bank of England base rate rises.

The Bank of England has raised interest rates significantly in the last year in attempts to combat inflation, meaning those on fixed-rate mortgages who are remortgaging this year will also be faced with massive hikes to their mortgage payments. This could be a major tipping point for ‘Anxious and At Risk’ households.

It is also hugely concerning that millions are heavily relying on Buy Now Pay Later schemes. Previous Which? research shows that many BNPL users do not realise they are taking on debt or consider the prospect of missing payments.

The government must not delay plans to introduce changes to the BNPL industry and ensure that consumers are given stronger safeguards to protect them. This needs to include greater marketing transparency, information about the risks of missed payments and consumer credit checks.

At such a difficult financial time, businesses must also do everything in their power to ease pressures on household budgets. Which? is calling on essential businesses – energy firms, broadband providers and supermarkets – to do more to help their customers and ensure they are providing value for money.

For example, supermarkets need to make budget line items that support a healthy diet widely available – particularly in convenience stores.

Telecoms firms must cancel future mid-contract price hikes and energy firms need to ensure their customer service departments are fully staffed and able to support any customers who are struggling to make ends meet.

Rocio Concha, Which? Director of Policy and Advocacy, said:  “Our research reveals that almost eight million people have been left balancing on a financial knife-edge.

“Until now, the government and policymakers have rightly focused on supporting the millions who are already failing to make ends meet, but this ‘Anxious and At Risk’ group is a ticking time bomb.

They are far more likely to have relied on borrowing to make ends meet but with interest rates continuing to rise, it’s only a matter of time before they find themselves facing serious hardship.

“The government must help those most in need by tightening regulation on buy now pay later to stop unaffordable lending and ensuring essential businesses are doing everything in their power to ease pressures on household finances.”

Do you need help to deal with your debt? Granton Information Centre can help: call 0131 551 2459, 0131 552 0458 or email info@gic.org.uk

Social Security Scotland: School Age Payment update

Parents or carers who get Housing Benefit but don’t receive Scottish Child Payment  need to apply for the School Age Payment as they will not receive it automatically.

Additionally, some young parents, those under 18 or 18 to 19 year olds who are dependent on someone else but don’t receive qualifying benefits, also need to apply for the School Age Payment as they will not receive it automatically.

Anyone who has opted out from receiving automatic awards, or who has chosen not to apply for Scottish Child Payment, will also have to apply for School Age Payment

The School Age Payment of £294.70 is designed to help with the costs of preparing for school. Parents or carers of children born between March 1 2018 and 28 February 2019 can apply online at the Scottish Government website.

Clients can contact a client advisor by calling 0800 182 2222 or by using our webchat.

People must apply before the closing date of 28 February 2024. Parents or carers who defer their child’s entry to school from August 2023 to August 2024 should still apply before the closing date.

More information is available on the Scottish Government website. 

Summer Savings

Metro Bank Offers Tips to Make This Summer More Affordable

Everything is more expensive this year both at home and abroad. A new report[1] has just revealed that the average price of package holidays across five top destinations is up more than 30%, with the holiday costs to some of Brits’ most favoured destinations – Spain, Turkey, Greece, Portugal and Cyprus – up by nearly 12% compared to last summer. 

Whether you are planning days out, a staycation or holidaying abroad, Metro Bank has some tips to make this summer more affordable.

“Following our top tips can help keep your summer fun filled but more affordable this year,” said Metro Bank’s consumer guru Mona Patel.

“Whether you are planning days out, a staycation, or are even off abroad, there are always ways to save money.”

Metro Bank Summer Tips:

  1. Online Deals
    Whatever your plans this summer, check out sites like Wowcher.co.uk which offers deals on UK or foreign city breaks, theatre tickets and theme parks or Groupon.com for everything from afternoon tea to spa breaks – on average you can save 30% using specialist sites.
  1. House swap for a free holiday
    Sites like LoveHomeSwap allow you to swap your home with any of 10,000 worldwide properties on their site. All these sites charge a fee – LoveHomeSwap will give you a 10-day free trial with membership costs varying from £8 – £12 per month.
  1. airbnb
    If you are planning to stay with relatives or travel this summer why not airbnb your property and offset some of the costs? airbnb not only verify guests and offer insurance protection, but they also connect you to a local Superhost to guide you through the process. Typically, fees are a flat service fee of 3% of the reservation subtotal when you get paid. airbnb also collect a fee from guests when they book. In many areas Airbnb also collects and pays sales and tourism taxes automatically on your behalf. One caveat – check that your mortgage provider has no objections. Metro Bank for example lets its residential mortgage customers rent out their properties on airbnb or similar sites for 90 days without impacting the terms and conditions of their mortgage.
  1. Foreign Transactions
    Choose your credit and debit cards wisely. Always check with your card issuer what additional charges will apply on foreign card transactions before you travel so you can plan and budget accordingly. In Europe Metro Bank’s debit and credit cards have no fees at all whether withdrawing cash, or when paying by card in shops and restaurants. 
  1. Cheap Arts
    Want to see a West End show or London attraction? Sites like todaytix  or TKTS London offer same day cut price theatre or attraction tickets. There are more than 25 free museums and 10 free art galleries in London alone. Search for free activities near me to find out what is in your area.

Check out cinema offers. For example, Vue is currently staging Mini Mornings where tickets for kids’ films cost from £2.49 for both children and adults – a fraction of the normal ticket prices.

  1. Off-Peak Travel

Public transport is much cheaper if you travel off peak. In general, off-peak hours begin at 09:30 from Monday to Friday in cities and large towns and at 09:00 everywhere else.

High food prices NOT driven by lack of supermarkets competition, says CMA

  • Evidence to date indicates high food price inflation has not been driven by weak retail competition, but competitive pressure is important as input prices fall
  • Next phase of CMA probe will examine competition and prices across the supply chain for the product categories identified
  • Rules on unit pricing should be tightened and retailers must comply to help shoppers compare prices easily

The Competition and Markets Authority (CMA) has today published an initial update on its ongoing work to tackle cost of living pressures in groceries with the publication of two reports: an assessment of retail competition in the groceries sector and a review of unit pricing practices across major retailers.

At a time when food and other grocery prices are rising it is crucial that people can be confident that competition is working effectively to keep price rises as low as possible and that people can shop around and compare prices easily and with confidence.

Groceries

Over the past two months, the CMA has assessed how retail competition is working in the UK grocery sector, particularly between supermarkets such as Asda, Morrisons, Sainsbury’s and Tesco as well as discounters, including Aldi and Lidl. Looking at the effectiveness of retail competition across the market, this stage of the CMA’s review has focused on the extent to which rivalry between retailers ensures they keep their prices as low as possible and whether consumers can shop around to get the best deals.

Although food price inflation is at historically high levels, evidence collected to date by the CMA indicates that competition issues have not been driving this.

In particular:

  • Operating profits in the retail grocery sector fell by 41.5% in 2022/23, compared with the previous year while average operating margins fell from 3.2% to 1.8%. This is due to retailers’ costs increasing faster than their revenues, indicating that rising costs have not been passed on in full to consumers.
  • Consumers are shopping around to get the best deals, and the lowest-price retailers – Aldi and Lidl – have gained share from their competitors. This suggests retailers are restricted in their ability to raise prices without losing business.

However not everyone is able to benefit fully from strong competition, particularly those who cannot travel to large stores or shop online, and therefore may rely on higher-priced convenience stores.

Now that some input costs are starting to fall, there are some signs that grocery retailers are planning to start rebuilding their profit margins. The CMA will monitor this carefully in the months ahead, to ensure that people benefit from competitive prices as input costs fall.

The CMA’s review so far has focused on overall indicators of effective retail competition. It has not yet examined competition for individual product categories or across the wider grocery supply chain. This will be an important focus for the next phase of its work. Today’s update identifies 10 indicative product categories (including milk, bread, and baby formula) that merit further analysis to gain a deeper understanding of competition and price dynamics. Our choices are not an indication of any provisional concerns that competition for these products is ineffective.

As part of its ongoing work, the CMA could make recommendations to address any competition issues it finds or take a closer look at any areas which justify further scrutiny.

Unit Pricing

At a time when shoppers are looking for the most competitive deals, unit pricing provides critical information to ensure people can compare prices effectively.

The review looked at 11 supermarkets and 7 variety retailers (stores that sell homeware and household goods with a more limited range of groceries) that operate in the UK .

The CMA has found compliance concerns with the Price Marking Order (PMO) amongst all those it reviewed, however for some retailers these were relatively minor. The CMA has identified that compliance is worse amongst some variety retailers.

Some of the problems stem from the unit pricing rules themselves, which allow unhelpful inconsistencies in retailers’ practices and leave too much scope for interpretation. As a result, shoppers may be finding it hard to spot and compare the best deals.

The CMA’s concerns relate to:

  • Consistency – different measurements are being used for similar types of products, making it hard for consumers to compare deals on a like-for-like basis. For example, tea bags being priced per 100 grams for some products and others being unit priced per each tea bag.
  • Transparency – missing or incorrectly calculated unit pricing information both in store and online. For example, 250ml handwash costing £1.19 but unit priced at £476.00 per 100ml and unit pricing information unavailable online until items were selected.
  • Legibility – unit pricing information being difficult to read, for example text on labels being too small or shelf edge labels being obscured by promotional information or by shop fittings.
  • Promotions – some retailers not displaying unit prices for any products on promotion.

In its report, the CMA has set out recommendations on the unit pricing rules and is calling on the government to reform this legislation, to help shoppers spot the best deals. The CMA has also written to those that are not fully complying with the PMO and expects them to make changes to address its concerns or risk enforcement action.

More broadly the CMA is calling on all retailers to give consumers the unit pricing information they need to make meaningful comparisons, particularly for products on promotion, even before any reforms to the PMO are introduced.

The CMA will publish the findings of its consumer research into the use of unit pricing in Autumn 2023.

Sarah Cardell, CEO of the CMA said: With so many people struggling to feed their families, it’s vital that we do everything we can to make sure people find the best prices easily.

“We’ve found that not all retailers are displaying prices as clearly as they should , which could be hampering people’s ability to compare product prices. We’re writing to these retailers and warning them to make the necessary changes or risk facing enforcement action . The law itself needs to be tightened here, so we are also calling on the government to bring in reforms.

“We’ve also looked at how competition is working across the grocery retail market more widely. The overall evidence suggests a better picture than in the fuel market, with stronger price competition between all of the supermarkets and discounters. In the next phase of our work, we will examine competition and prices across the supply chain for the product categories we’ve identified.

“We’ll also continue to monitor the situation to ensure that competition remains effective as input costs start to fall.

More information and full reports can be found on our 

Unit Pricing and Groceries pages.

TUC: It’s time to end the pay disparity that penalises disabled workers

Disabled people are more at risk of having to make the difficult decision between heating and eating

Before the outbreak of the Covid-19 pandemic disabled workers faced huge barriers getting into and staying in work (writes TUC General Secretary PAUL NOWAK).

The pandemic, and the huge changes it has caused to our everyday lives, has exacerbated the barriers disabled people face.

Not only have disabled people been disproportionately affected in terms of loss of life, with six in 10 Covid-19 related deaths being disabled people, but pre-existing workplace barriers have been accentuated by the pandemic.

And now, new data published by the TUC for our disabled workers conference shows disabled workers are much more likely to earn less than non-disabled workers.

That’s not right.

Having an impairment should never mean you get paid less or that you’re on worse terms and conditions. However, for too many disabled workers in this country, it is an all too true reality.

With spiralling inflation and eye watering bills, workers are having their income stretched in every direction. But for disabled people, the situation is even more challenging.

Let’s not forget – disabled workers face even higher living costs than non-disabled workers. So as the cost-of-living crisis continues to play havoc with everyone’s lives, we know that these workers are feeling the pinch even more.

But the challenges don’t end there.

Disabled workers also encounter more barriers in the workplace than non-disabled colleagues – with many worried that if they ask their employer for the reasonable adjustments they need to do their job, they’ll be refused outright.

New TUC analysis reveals disabled workers are much more likely to be paid less than their non-disabled colleagues – with those in the North of England and Wales even more likely to be paid less.

And we know that disabled people are more at risk of having to make the difficult decision between heating and eating.

With this cost-of-living crisis not looking like it’s going to end any time soon, things are only going to get worse. We need action now.

With the government too focused on its own political survival, ministers have done nothing to put the mind of disabled workers at ease.

Our call is clear: It’s time to end the pay disparity that penalises disabled workers and it’s time disabled workers get the support they need in the workplace.

At the TUC’s disabled workers conference, we heard from delegates about how the cost-of-living crisis is hitting disabled workers across the country. And we heard how we can build workplaces that work for everyone.

That means stamping out insecure work by banning zero-hour contracts, increasing the minimum wage and outlawing fire and rehire.

That means giving disabled workers fair access to request reasonable adjustments, and fining those employers who discriminate against workers because of any impairment. 

And that means forcing employers to come with an action plan to report their disability pay and employment gaps.

This is a plan which will deliver and transform the lives of so many disabled workers across the country.

Ministers must step up and act now.

Car insurance premiums rise by 40% across UK

The average cost of car insurance is now £776, after increasing by £119 (18%) in the past 3 months alone

●      Council tax and energy tops the list of the most expensive household bills, costing Brits £984 and £964 respectively, on average(1).

●      But drivers are still seeing savings, despite big price hikes, according to further research by Confused.com. Motorists who shopped around and switched in the past 3 months saved £63, on average, with only 9% reporting a cheaper renewal price year-on-year.

●      Why are prices rising? Confused.com experts suggest an increase in claims and consequently the cost of claims are rapidly rising. This would account for the unprecedented high increases in car insurance costs.

●      Confused.com issues advice to drivers on how to reduce car insurance costs as 2 in 5 (40%) Brits call on insurers to do more to keep prices lower. 

A staggering increase in the average cost of car insurance places it as the third most expensive household bill, new data has revealed. 

Motorists are now paying £776 for their car insurance, following a £119 (18%) increase in prices over the past 3 months, on average. That’s according to the latest (Q2 2023) car insurance price index, powered by WTW.

Based on more than 6 million quotes over the quarter, it’s the most comprehensive car insurance price index for comprehensive policies. According to the data, prices are now £222, or 40%, more expensive than they were 12 months ago, on average. This makes it the biggest price increase on record. And to put into context how quickly prices have increased, the average premium is 49% more expensive than 2 years ago, in comparison. 

These steep increases mean that car insurance costs are close to the expensive rates people are paying for council tax and energy, according to further research. A survey of 2,000 UK drivers(1) found that the average council tax bill is £984 per year, and £964 for energy. And that’s in addition to other expensive essentials, such as food and home entertainment.

That’s as research shows the average UK driver is spending:

●       £1,022 on food shopping

●      £690 on home entertainment services such as broadband and TV subscriptions. 

Are all drivers seeing price increases? 

Although some drivers saw some savings, most drivers are feeling the effects of these price hikes.  While this may look bleak to drivers, especially during a financially turbulent time, research also shows that there are savings to be made. According to the additional research, only 9% of UK drivers had a cheaper renewal price last quarter (April – June).

This proves that myths surrounding the regulations implemented by the Financial Conduct Authority in January 2021 aren’t true. Following the changes, many drivers believed they wouldn‘t get a more expensive renewal price.

But as the research proves, this isn’t the case. In fact, almost 2 in 3 (59%) saw their price increase, by £52, on average. This is despite almost a third (31%) having no driving convictions, and a further third (32%) having at least 1 year’s no-claims bonus on their policy.

However, many people trusted that they could find a better price, with almost half (46%) going on to switch providers. Of these, almost 2 in 3 (64%) used a price comparison site and saved £63 on their original price, on average.

It’s a similar picture for those who saw a cheaper price, which averaged at just £34 less than the previous year. Two in 5 (40%) went on to buy with another provider, with 1 in 2 (50%) using a price comparison site and also saved £63, on average.

It seems buying a new car insurance policy right now may sound unaffordable. But figures prove that drivers can still save money compared to the renewal price their current insurer is offering. 

Why are prices increasing? 

It’s clear from the data that prices are increasing for all drivers, whether they choose to renew or buy a new policy. But why are prices rising so significantly? 

One of  the biggest expenses for insurers is claims. During the pandemic, fewer cars were on the road.  As a result, the industry saw a reasonable drop in prices to reflect the reduction in claims being made. But now, research suggests normal driving habits have resumed. This could mean insurers are having to pay out for more claims than they were 2 years ago. 

But the important fact here is that the cost of these claims has increased significantly for insurers. Like with many other businesses, this is arguably down to the shift in inflation rates reported over the past 18 months.

And this, as a result, has driven up the cost of repairs and maintenance, which in the event of a claim, is covered by the insurer. This is especially true for newer cars, and many used cars that are in high demand. In fact, the Association for British Insurers (ABI) reported a 33% uplift in the cost of vehicle repairs last quarter.

We’re also seeing that used cars are holding their value more in the current climate. This means that payouts for write-offs or total losses are costing insurers more to cover. Similarly, new cars as well as electric vehicles are much higher in value than before due to more expensive features and upgrades coming as standard. This means paying out to replace a new car is costing insurers more.

What does this mean for drivers?

While the average cost of car insurance in the UK has reached £776, there are some drivers that will be paying significantly more than this. The price paid  varies quite a bit, based on a drivers’ gender, location and age. 

For example, the average premium for male drivers is now £827. This has increased by £236 (40%) in the last year, and £125 (18%) in the past 3 months. In comparison, female drivers are now paying £690, following a £198 (40%) increase year-on-year, and £107 (18%) over the quarter. This brings the average gap between them to £137.

Similarly, a driver’s location has a huge bearing on their price, with some now paying over £1,000 for their car insurance. A £299 (42%) increase in prices in Outer London has put the average premium in the region at £1,003 – the first time it has reached over £1,000 since the index began. However, Inner London remains the most expensive region in the UK, with the average driver now paying out £1,257. 

As expected, prices have risen across all UK regions, but some are still paying a considerable amount less than others. For example, the average insurance cost in the South West is only £509, despite a £136 (36%) increase over the year.

And in most cases, prices are at their most expensive on record for each region, with the exception of Manchester and Merseyside. The average car insurance cost in the region is now £965, making it the most expensive region outside of London. However, this is still £48 (-5%) less than the highest price paid on record (Q4 2011).

A driver’s age also determines how much they  pay, with younger drivers bearing the brunt of the biggest car insurance costs. Steep increases means that drivers aged between 17 and 19 are paying out more than £2,000 for their policies, on average. In particular, 18-year-olds are paying the most, with the average premium now £2,404.

This is followed by 19-year-olds, who are paying £2,097, and 17-year-olds who are paying £2,088. At the other end of the scale, drivers around retirement age benefit from the cheapest prices. In fact, for 69-year-olds, the average premium is just £413, in comparison, with drivers aged 61 and over all paying in the £400 bracket.

Why are some drivers paying more than others?

While it may seem unjustified for some drivers to be paying out such hefty prices compared to others, this all comes down to the risk.

For example, male drivers typically have a higher risk profile than women, as they statistically drive more miles and more expensive cars. This puts them at an increased risk of a payout for insurers, as they have to account for the cost of covering a higher value car. 

Claims frequency is the biggest explanation for why drivers pay more, and when it comes to location, it’s typically the more populated areas that see the biggest prices. This is because these areas have more cars on the road, higher traffic levels and therefore a higher risk of accidents and claims.

And when it comes to age, younger drivers who are typically less experienced  pay more as they’re at a higher risk of making a claim. However, as they build up their driving experience and their no-claims, they should see their costs reduce over time.

How can drivers save money?

With the cost of living crisis continuing to hit Brits in the pocket, it’s clear car insurance is quickly becoming another hefty expense for drivers. 

It’s no surprise, then, that 2 in 5 (40%) motorists are calling on insurers to do more to make the cost of car insurance more affordable. In fact, 1 in 4 (25%) claim they’re having to drive less due to the rising costs.

And 1 in 5 (20%) are finding the overall cost of driving too difficult to manage. With the average car insurance price now £772, the overall cost of motoring has reached almost £2,000. That’s as research shows the average UK driver is spending an additional £720 on fuel per year, and £455 on other car maintenance costs.

However, according to Confused.com’s fuel price index, the average price of petrol dropped to 143.3p in June, from 174.5p in August last year. Similarly, the price of diesel is just 145.5p compared to an eye-watering 187.1p, which drivers were paying last November. This goes to show that there are still some areas of motoring where drivers are saving money.

But just because car insurance prices are increasing, doesn’t mean that motorists have to pay more than they need to for their policies.

Experts at Confused.com have identified some key ways for drivers to take a few pounds off their insurance price, without making any significant changes to the way they drive.

●      Be accurate with your mileage – Generally, the more miles you drive, the more likely you are to have an accident and make a claim. This means the higher your mileage, the more you pay for your car insurance. So, driving fewer miles can be a great way to save money on your car insurance policy. But don’t assume that a low mileage always means low prices. If you barely drive at all, your insurance company could see that as a risk as well.

●      Increase your voluntary excess – Increasing your voluntary excess can help you get cheaper car insurance, but you need to make sure you can afford to pay it, if you need to claim.

●      Pay for your car insurance annually – If you can afford it, paying for your insurance in one go rather than monthly is one way to get cheaper car insurance. That’s because insurance companies always charge interest for spreading the cost of your cover over the year.

●      Enhance your car security – The harder it is to steal your car, the less of a risk it is. This usually means cheaper car insurance. There are several ways to improve your car security including:

○      Installing a Thatcham-approved car alarm or immobiliser, if it doesn’t already have one

○      Adding secondary levels of security like a steering lock.

○      Parking overnight in a secure, well-lit car park.

For more advice on how to reduce costs, visit Confused.com’s guide on how to get cheaper car insurance.

Louise Thomas, motor expert at Confused.com car insurance comments: “Car insurance has quickly become one of the biggest expenses for drivers. If prices continue at this rate then there’s no doubt drivers could be priced off the road, as they battle with other rising costs too.

“But what we do know is that many drivers were able to save some money when it came to renewal. And shopping around was the key to this. Even if prices were cheaper for them, the price they saw online was still significantly cheaper.

“Although this isn’t all drivers can do to save money. We always advise drivers to take a look at the details of their policy and make sure they’re accurate before committing to a price. Updating your mileage, or considering additional security could easily bring your price down.

“In the current climate we want to help drivers do all they can to make their insurance more affordable. But we know the key to this will be shopping around and seeing what the best price out there is. It’s a competitive industry and we’re confident that switching will result in savings.

“This is why we offer a guarantee to beat your renewal, or pay you the difference, plus £20. In this scenario, you don’t pay more, and you gain more cash!”

Council Tax ‘bombshell’ would hit 92,000 Edinburgh households – Boyack

Scottish Labour MSP Sarah Boyack has branded the SNP government’s consultation on Council Tax a “scandal”, revealing that the changes would hit 92,971 households in Edinburgh.

The SNP government is currently consulting on plans to hike Council Tax for properties in bands E to H – which would hit 39% per cent of households in Scotland’s capital.

People in the area could face increases of up to around £800.

This consultation follows years of ‘brutal’ budget cuts to Council budgets by the SNP government.

Scottish Labour MSP Sarah Boyack said: “Years of brutal cuts by the SNP has local services in [AREA] at breaking point, and now the government wants to plug the gaps with eye-watering Council Tax hikes of up to around £800.

“It is a scandal that ordinary Scots are once again being asked to pay more while getting less in return.

“This damaging Council Tax bombshell will hit more than 92,000 households in Edinburgh during the worst cost of living crisis in decades, piling pressure on people already facing impossible financial decisions.  

“Scots struggling with rising housing costs should be getting support from their government – but instead they are being asked to foot the bill for the SNP’s failure.

“Labour will stand up for people struggling with soaring living costs and fight for a fair deal for Edinburgh.”

BUT WHAT WOULD LABOUR ACTUALLY DO? REPLACE THE COUNCIL TAX? – Ed.

Local AuthorityHomes in bandsE to H % of homes affected  Potential increase  
Scotland715,31228% 
Aberdeen City32,65329%£821.11
Aberdeenshire50,87343%£768.12
Angus13,15923%£725.82
Argyll & Bute14,96332%£815.41
City of Edinburgh92,97139%£798.04
Clackmannanshire6,41326%£777.79
Dumfries & Galloway18,87026%£735.84
Dundee City10,43815%£819.39
East Ayrshire11,44720%£819.95
East Dunbartonshire25,47054%£780.38
East Lothian18,19336%£791.39
East Renfrewshire22,62357%£780.14
Falkirk18,08024%£751.81
Fife45,05626%£763.58
Glasgow City49,50117%£826.32
Highland34,14329%£786.73
Inverclyde7,14819%£788.16
Midlothian12,37429%£834.99
Moray9,55522%£788.67
Na h-Eileanan Siar1,55911%£711.53
North Ayrshire14,38721%£800.48
North Lanarkshire30,48220%£728.08
Orkney Islands1,91817%£754.78
Perth & Kinross26,90637%£773.78
Renfrewshire22,49226%£791.69
Scottish Borders16,51329%£747.56
Shetland Islands1,87117%£694.91
South Ayrshire18,49734%£801.05
South Lanarkshire41,06527%£717.07
Stirling17,65544%£816.68
West Dunbartonshire7,40317%£771.19
West Lothian20,63425%£766.77

Source: Chargeable Dwellings: Sep 2022 data: 

https://www.gov.scot/publications/council-tax-datasets/

Scottish Government Council Tax Consultation:

https://www.gov.scot/news/council-tax-consultation/