Council tax rebate cheques cashed at pawnbrokers

People have been cashing in their £150 council tax rebate cheques at a pawnbrokers because they cannot afford to wait for the money.

A large queue formed outside the Cash Shop in Rotherham, which deducts a £15 fee for the service.

Some of those waiting in line said they could not afford to wait days for a cheque to clear through their bank.

Rotherham Council said it advised using a bank, post office or the local authority to avoid fees.

The government is giving all households in bands A to D £150 through their council tax to help with the cost of living crisis.

For those who do not pay theirs through direct debit, a cheque is issued instead.

Speaking outside the Cash Shop, Aaron Parker, 39, said: "I've got no gas or electricity so it's really important I get the money now."

Mr Parker said he had joined a queue of about 50 people outside the Cash Shop on Wednesday, after 200 people were reported there the previous day.

He has a bank account, but said the only way to get to his nearest branch in Sheffield would be to walk seven miles.

"I got £134 so lost £16 but that money will get me through today.

"Things have been so bad literally I've been going to the bins to get food out on a night."

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.

Danny, who also cashed in his cheque, said his monthly wage of £1,200 only covered his car insurance and buying food for his five-year-old son.

"I live with my mum and if I lived alone, it would be either run my car or run my house. I can't afford to do both when I have my little boy to feed too.

"People have no choice but to come here if they want the money today as most of us can't wait three or four days for cheques to clear."

Another visitor to the Cash Shop, Jordan, said waiting days for his cheque to clear "was a joke" when bills had increased so much.

"I work 50 hours a week and sometimes overtime but it's still tough."

Richard Fuller, managing director of Cash Shop Ltd, said cashing fees were 7.9% of a cheque's face value plus a £2.99 handling fee.

He said the company took the "inherent risk the cheques may not clear" and there was a calculator on its website which "shows our pricing with complete transparency".

"Unfortunately, banks refuse to offer this type of basic service to their customers and moreover, put a hold on cheques for at least three days," he said.

Councillor Chris Read, leader of Rotherham Council, said: "In terms of running this scheme, the objective was to get this money out as quickly as we possibly could.

"We're one of of the first places in the country that will have got the money sent out to people, for the majority that means there will be money in their pockets much more quickly - but I accept that for some people it hasn't been the best way of doing it."

Along with paying it in with their bank or a post office, the council said it can make the payment into a bank account on behalf of a resident at no cost.

If residents do not have access to a bank account, cash payments can be arranged by appointment, the local authority added.

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