200 people queue at Rotherham pawnbrokers to cash council tax rebate as they ‘can’t afford’ to wait

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Up to 200 people today queued up outside a pawnbrokers to cash in their £150 council tax rebate cheques because the cost-of-living crisis have left them desperate for money.

Residents in Rotherham waited in huge lines outside town centre shops to get their hands on cash as they told how they don’t have time to wait for the cheques to clear in their account.

One man told how he is so hard-up that he doesn’t have enough money to pay his bills and has been left rummaging in bins for food. 

Others told how they have resorted to cashing in the cheques because their local bank branches have closed – and they are not able to travel long distances.

Pawnbrokers are charging a £2.99 one-off fee plus 7.9% cashing fee for the cheques. This amounts to a £14.86 bill – leaving residents with just £13 – and giving £15 of the Treasury’s targeted cost of living relief per person to the private brokers instead. 

Council tax rebates are being distributed to all households in tax zones A to D, some 20 million households across the UK. 

For UK residents residents who pay council tax by direct debit, the £150 rebate is deducted from the cost of their bill – but for those who do not, councils such as Rotherham are sending out postal cheques instead.

Some of those 34,000 households affected in Rotherham, South Yorkshire, are now deciding to cash in their cheques to get instant access to the cash.      

Rotherham is one of the most deprived areas of the UK with 34.5% of children living in low income households and the average worker earning almost £1,000 a year less than the average UK employee.

Around 200 people were spotted queuing outside the town’s Cash Shop and a further 50 yesterday – but customers were told to come back later this morning after the shop ran out of money to give people.

Locals told MailOnline they are struggling to access local banks and the right forms of ID but need money immediately due to the cost of living crisis.  

From needing the cash to pay for essential items such as a mobile phone to not wanting the rebate to disappear paying off their bank overdraft, the poorest in Rotherham say they have no choice.

Terri Sykes, 34, from Maltby, went to the Cash Shop to cash her cheque in and gave up when she saw the queue.

She said: ‘They’ve [The council] sent it to my partner even though I’m the one who does all the finances and he doesn’t have a bank account.

‘We’re in the middle of moving house so I haven’t got time to queue, it is a mess.’

Leon Thomas, 45, now has to rely on his sister to feed him after he was unable to cash his cheque.

They had both visited the Cash Shop after receiving their cheques in the post, but Leon had to leave empty-handed despite having his council tax bill and bank details to hand.

He said: ‘I gave them my bank details, council tax bill and passport, but because my passport was out of date by three months, I couldn’t get it.

‘I really need the money to live.’

Passport renewals are notoriously difficult at the moment as the government deals with a huge backlog and holidaymakers report waiting for months before receiving their new one. 

His sister Melissa said: ‘I’m disgusted to be honest, absolutely disgusted.

‘If it wasn’t for me, my brother wouldn’t be able to eat.’

Carly Stubbs, 32, from Dinnington, queued up outside a Ramsdens pawnbrokers.

She said: ‘I’ve been down three times now and each time the queue is a mile long.

‘I’m with Monzo so there isn’t an in-person bank, you have to send it off and it takes weeks.’

Carly is currently studying at Sheffield Hallam and working as a support worker. She went to three shops eight different times to cash her cheque in and was finally able to cash it in at H&T pawnbrokers for a fee of £16. 

Monzo is one of several new banks which exists almost entirely online, relying on users who download an app to bank with them.

This might cut overhead costs, but makes cashing a cheque in extremely difficult. 

Meanwhile Aaron Parker, 39, told a local radio station that his bank had shut his local branch so would have had to walk seven miles to Sheffield to cash it into his account.

Rotherham’s branch of Barclays closed last year, sparking local outrage, and Barclays customers must now head to Sheffield – with the bus costing valuable time and £2.80 each way.

Aaron has no gas or electricity and has been reduced to rummaging through bins for food.

He said the money from his council tax rebate would allow him to pay some bills and buy back his phone from Cash Convertors, which he had previously sold for £35.

He said: ‘I got £134 so lost £16 but that money will get me through today.’

The Cash Shop is currently charging a £2.99 fee plus a 7.9% cashing fee, leaving cash-strapped residents out of pocket compared to those who can afford to travel or wait for their cheque to be cleared.

Another woman, who did not wish to be named, told MailOnline: ‘I work 37 hours a week as a taxi controller.

‘I couldn’t believe the queues when I saw them. It can take up to three days to process the cheque through the bank and I need the money now.’

Local councillor Michael Bennett-Sylvester, who posted a picture of the queues on Twitter on Tuesday, said the sight of people queuing to desperately cash them in should ‘shame us as a nation’.

He spoke to people in the queue and said some did not have a bank account at all while others said they would not see the cash due to being in their overdraft.

He said: ‘It’s people that need it as soon as possible that are queuing, the delivery of this help has been handled quite badly.

‘You can be on a well-paid job in a band D council house and get £150, but if you’re struggling, you get £135.

‘It’s expensive to be poor in this country, you’re forever fighting just to keep up with everything.

‘One of my constituents walked into town to cash her cheque into the Post Office, but had to go home because she brought the wrong ID. She spent five hours walking just to access her own money.

‘Usually people don’t see the desperation and issues people are facing because they’re happening in isolation, but these queues have concentrated all that into the one place.

‘It’s a harsh look in the mirror for us as a society, it shames us as country because we’re not looking after the people who have it the hardest.

‘Have politicians that have delivered this actually taken into account how people live their lives?’

The council tax rebate was announced by Chancellor Rishi Sunak in February to help the poorest families with the cost of living crisis.

The rebate, worth £150, was applied to anyone in the UK living in council tax bands A to D, which equates to around 20 million households.

But it was left up to individual councils to decide how the rebate would be distributed – and many reported delays in paying out to residents due to software and administrative delays.

According to the calculator on the Cash Shop’s website, a £150 cheque will be cashed for £135.16 – after £14.84 has been deducted in the shop’s own charges. 

Labour MP for Rotherham Sarah Champion told MailOnline: ‘This is a clear indication of how desperate people are as the cost of living soars ever higher. 

‘It’s painful that things are so bad for the most vulnerable that they are forced to pay to access this much needed cash. 

‘As ever, the poorest in our communities suffer multiple blows under the Tories.’

The Cash Shop advertises its services on the basis of being ‘low cost’ and more convenient than bank branches. It also cites that your ‘overdraft won’t take your money.’

For those already in debt or in their account overdraft, cashing the cheque in a pawnbrokers provides an instant cash boost to help get food on the table, pay the electricity bill or fill up the car so they can travel to work – whereas cashing into their bank account would see the money instantly swallowed up.

But when cashing into a UK bank account cheques of this value do not usually incur a fee, meaning those who can afford to wait to do so will receive almost £15 more than those who can’t – and it is the poorest who receive the least cash.

Rotherham is already a disadvantaged area of the UK with lower than average wages and high levels of poverty.

It is therefore likely to be disproportionately impacted by the squeeze of the cost of living crisis.

The most recent government data for the 2020/2021 year showed a drop in real income across the UK of 1.4% once housing costs had been taken into account – although this data should be treated with caution due to the impact of the coronavirus pandemic and schemes such as furlough.

And Rotherham is behind the rest of the UK as it is – the most recent data from Rotherham Council shows an average weekly wage of £516.10, more than £25 lower per week than Yorkshire and the Humber’s £540.40 and more than £80 less than the UK average, £587.10.

Over the course of year, that attributes to residents of Rotherham earning £972 less than the average UK worker. 

Meanwhile poverty rates in the area remain high.

The latest data on the percentage of children in Rotherham who live in child poverty shows 34.5% families with children within Sarah Champion’s constituency live in relative poverty.

This is the 23rd worse parliamentary constituency in the UK out of 650, meaning Rotherham is in the poorest 4% of places to grow up. 

This means their family incomes are officially classed as low by the government – although these statistics do not take into account housing costs across the country. 

But this data is from 2020/2021, before inflation hit 9% and the cost of living began spiraling out of control.

A report released by the House of Commons this year shows poverty statistics are expected to get worse as energy and food prices are set to rise, with the cost of filling up an average UK car now just shy of £100.

The report states it is the poorest families who will see the largest impact, expecting them to increase the amount of income they spend on energy from 8.5% to 12% – three times the increase that the most well-off homes will see.

Councillor Chris Read, Leader of Rotherham Council said: ‘Making these Council Tax energy support payments within the criteria set by Government has been extremely challenging for all Councils. 

‘We know people are struggling so our aim has been to get the money to them as quickly possible and we looked at a number of options for doing this, without the need for an application process. 

‘Over 114,000 payments have been made to date, which accounts for nearly all eligible households in Rotherham. 

‘We believe we are one of just a few areas of the country which has managed that so quickly.

‘31,000 cheques have been issued in the last week, predominantly to people who don’t pay their Council Tax by direct debit. 

‘We advise that people pay this into their bank account. If people would sooner not cash the cheque or pay it into a bank account themselves, they have the option of returning it with their bank details if they wish, so that we can pay the money direct into their account at no cost. 

‘We are also offering the opportunity to people who don’t have a bank account to return the cheque with their phone number so that we can make an appointment for them to receive a cash payment.

‘Unfortunately there is no perfect solution or template for making payments on this scale to suit everybody’s circumstances and everyone is trying to make the best of this difficult situation.’

Have you had to cash your council tax rebate at a pawnbroker? Get in touch at elizabeth.haigh@mailonline.co.uk