Because they can’t afford to wait for their council tax refund checks to clear, up to 200 individuals have gathered outside a pawnbrokers to cash them today.
The £150 refund is removed from the cost of council tax for UK households who pay by direct debit, but for those who do not, councils such as Rotherham are sending out postal cheques instead.
As the cost of living crisis bites, some of the 34,000 homes impacted in Rotherham, South Yorkshire, are resorting to extreme methods such as queuing at several pawnbrokers and digging through garbage for food.
Have you ever had to use a pawnbroker to get your council tax refund?
This amounts to a £14.86 bill, leaving residents with only £135 and handing the private brokers £15 of the Treasury’s planned cost of living relief per person.
Because local bank branches are closing, residents are turning to pawnbrokers instead of taking a time-consuming £5.60 bus ride.
The situation is exacerbated by the emergence of new online-only banks.
Depending on household size, an extra £15 may buy a whole week’s worth of groceries from discount shops such as Aldi and Lidl for individuals on modest incomes.
Rotherham is one of the poorest locations in the UK, with 34.5 percent of children living in low-income families and the average worker earning about £1,000 less per year than the national average.
On Tuesday, around 200 people queued outside the town’s Cash Shop, with another 50 waiting yesterday – however customers were instructed to return later today morning as the shop ran out of money to give out.
Locals informed MailOnline that they are having difficulty accessing local banks and obtaining the proper forms of identification, despite the fact that they require money immediately owing to the cost of living problem.
The poorest in Rotherham feel they have no choice because they need the money for necessary necessities like a phone and don’t want the refund to disappear paying off their bank overdraft.
Carly Stubbs is a student who also works as a support worker; she uses Monzo, a branchless bank, which means that cashing her check may take weeks. It took her eight tries to cash her check at a pawnbrokers in Rotherham.
Terri Sykes, left, and Carly Stubbs both had trouble cashing their checks at pawnbrokers because of large lines and cash shortages.
Terri Sykes, 34, of Maltby, went to the Cash Shop to cash her check but gave up after seeing the line.
‘They [the council] sent it to my partner, even though I handle all the finances and he doesn’t have a bank account,’ she explained.
‘We’re in the middle of a move, so I don’t have time to queue; it’s a disaster.’
After being unable to cash his check, Leon Thomas, 45, now has to rely on his sister to feed him.
Despite having his council tax bill and bank details on hand, Leon had to leave empty-handed after visiting the Cash Shop after receiving his cheques in the mail.
‘I provided them my bank details, council tax bill, and passport, but I couldn’t get it since my passport was three months old.’
‘I’m in desperate need of money.’
Passport renewals are notoriously tough at the present, due to a massive backlog in the government, and travellers report waiting months for their new passport.
‘I’m disgusted to be honest, totally disgusted,’ his sister Melissa remarked.
‘My brother wouldn’t be able to eat if it weren’t for me.’
Dinnington resident Carly Stubbs, 32, stood in line outside a Ramsdens pawnbrokers.
‘I’ve been down three times already, and each time the line is a mile long,’ she claimed.
‘I use Monzo, so there isn’t an in-person bank; you have to mail it, which takes weeks.’
Carly is a student at Sheffield Hallam University and works as a support worker. She tried eight different shops to cash her check before eventually being allowed to do so at H&T pawnbrokers for a cost of £16.
Monzo is one of several new banks that operate virtually exclusively online, relying on people to bank with them via an app.
This may save money on overhead, but it makes cashing a check incredibly difficult.
Meanwhile, Aaron Parker, 39, informed a local radio station that his bank had closed its local branch, forcing him to trek seven miles to Sheffield to deposit the money.
Barclays’ Rotherham branch closed last year, causing local uproar, and Barclays clients must now go to Sheffield, which takes time and costs £2.80 each trip.
Aaron has been driven to scavenging through bins for meals due to a lack of gas and electricity.
He said that the money from his council tax rebate would enable him to pay certain bills and repurchase his phone from Cash Convertors, which he had previously sold for £35.
‘I got £134, so I lost £16. But that money will get me through today,’ he explained.
The Cash Shop now charges £2.99 plus a 7.9% cashing fee, leaving cash-strapped locals in the negative compared to those who can afford to travel or wait for their check to clear.
‘I work 37 hours a week as a taxi controller,’ another woman, who did not want to be identified, told MailOnline.
‘When I saw the lines, I couldn’t believe it.’ The bank can take up to three days to process the check, and I need the money right away.’
People queuing to desperately cash them in should’shame us as a nation,’ according to local councillor Michael Bennett-Sylvester, who uploaded a picture of the lines on Twitter on Tuesday.
He spoke with those in line and discovered that some didn’t have a bank account at all, while others claimed they wouldn’t see the money because they were overdrawn.
‘People who need it as soon as possible are queuing, and the delivery of this assistance has been managed rather badly,’ he said.
‘You can earn £150 in a well-paid job and live in a band D council housing, but if you’re struggling, you’ll get £135.
‘Being poor in this nation is expensive; you’re constantly battling just to keep up with things.’
‘One of my constituents went into town to pay her check at the Post Office, but she had to return home because she had brought the wrong identification.’ She walked for five hours only to get to her own money.
‘Normally, people are blind to people’s desperation and problems because they occur in solitude, but these lines have brought everything together in one spot.’
‘It’s a sobering reflection for us as a culture; it shames us as a country because we’re not looking after those who are suffering the most.’
‘Have the politicians who provided this taken into consideration how people live their lives?’
Chancellor Rishi Sunak announced the council tax rebate in February to help the poorest families cope with the cost of living problem.
Anyone in the UK residing in council tax bands A to D, which translates to nearly 20 million households, was eligible for the £150 rebate.
Boris Johnson and Rishi Sunak are fighting demands from the Cabinet for…
However, individual councils were left to decide how the rebate would be distributed, and many residents reported delays in receiving payments due to software and administrative issues.
A £150 check will be cashed for £135.16, according to the Cash Shop’s calculator, after the shop’s own charges of £14.84 are deducted.
However, when cashing a cheque of this value into a UK bank account, there is normally no fee, so those who can afford to wait will receive nearly £15 more than those who can’t – and the poorest will receive the least cash.
Rotherham is already a disadvantaged area of the United Kingdom, with lower-than-average salaries and significant poverty rates.
As a result, the squeeze of the cost-of-living crisis is likely to affect it disproportionately.
After housing costs were taken into account, the most recent government data for the 2020/2021 year showed a 1.4 percent drop in real income across the UK, though this data should be treated with caution due to the impact of the coronavirus pandemic and schemes like furlough.
And Rotherham is already behind the rest of the UK: according to the most recent data from Rotherham Council, the average weekly wage in Rotherham is £516.10, more than £25 less than Yorkshire and the Humber’s £540.40 and more than £80 less than the UK average of £587.10.
This results in Rotherham residents earning £972 less than the average UK worker over the course of a year.
Meanwhile, the area’s poverty rate remains high.
According to the most recent data on the percentage of children in Rotherham who are poor, 34.5 percent of households with children in Sarah Champion’s area are poor.
Out of 650 parliamentary constituencies in the UK, Rotherham is the 23rd worst, putting it in the bottom 4% of places to live.
This means that their family incomes are officially classified as low by the government, despite the fact that these figures do not account for housing costs across the country.
However, this information is from 2020/2021, before inflation reached 9% and the cost of living began to spiral out of control.
The cost of filling up an average UK car is now just shy of £100, according to a report released by the House of Commons this year. Poverty statistics are expected to worsen as energy and food prices rise.
According to the report, the poorest families will bear the brunt of the impact, with their energy spending expected to rise from 8.5 percent to 12 percent, three times higher than that of the wealthiest households.
‘Making these Council Tax energy support payments within the criteria set by Government has been extremely challenging for all Councils,’ said Councillor Chris Read, Leader of Rotherham Council.
‘We know people are struggling, so our goal has been to get the money to them as soon as possible, and we looked at a number of options for doing so without requiring an application.’
‘To date, over 114,000 payments have been made, covering nearly all eligible Rotherham households.’
‘We believe we are one of only a few areas in the country to have accomplished this in such a short period of time.’
‘In the last week, 31,000 cheques have been issued, mostly to people who do not pay their Council Tax by direct debit.’
‘We recommend that consumers deposit this money into their bank accounts.’ If customers would rather not cash the check or deposit it into a bank account, they can return it with their bank information so that we can deposit the money directly into their account at no cost.
‘We’re also offering people without bank accounts the option of returning the check with their phone number so that we can set up an appointment for them to receive a cash payment.’
‘Unfortunately, there is no perfect solution or template for making payments on this scale that will suit everyone’s circumstances, and everyone is doing their best to make the best of a bad situation.’