Greater number of Scottish households struggling with cost of living than rest of UK

A greater proportion of households in Scotland are struggling with the cost of living crisis than those in England, a UK-wide study has found.

A survey of households across the UK has revealed 540,000, 21%, of Scottish households were in “serious financial difficulty”.

This figure was just under 15% for English households who participated in the study.

Figures come from the Financial Impact Tracker, commissioned by the abrdn Financial Fairness Trust and were analysed by a team at the University of Bristol.

The team have been analysing household finances since the start of the pandemic with a sample of 6,000 participants.

Scottish families were making a number of efforts to reduce their spending with more cutting back on things such as food, energy consumption and other expenditures.

Abrdn Financial Fairness Trust funds research and policy work to tackle financial problems and improve living standards for people on low-to-middle incomes in the UK.

It is an independent charitable trust registered in Scotland.

The survey discovered that 37% of Scottish households, 920,000, were cutting back on energy bills compared to 29% in England and 35% in Wales.

It was also found that 25% of Scottish households were cutting down on food (including eating out and takeaways) compared to 20% in England and 26% in Wales.

Scottish households were also found to have less savings to fall back on with 34% reporting no savings compared to 24% in England.

When asked to look ahead to the next three months, 24% of Scottish households responded that they feel it will be a constant struggle compared to the UK average of 18%.

Additionally, 30% of those asked in Scotland said they felt very worried about their finances over the next three months compared to 23% on average across the UK.

The number of households in “serious financial difficulties” was found to be worse than at any point during the pandemic with people across the UK suffering serious financial difficulties.

Mubin Haq, CEO of abrdn Financial Fairness Trust, said: “On a range of measures the costs of living crisis is hitting Scottish families harder than families in England.

“There are significantly more who are in serious financial difficulties; finding it a constant struggle to pay their bills; and with few savings to fall back on. Despite Scotland having a lower poverty rate than England, anxiety levels are much greater.

“This is likely to be driven by even greater concerns about energy bills given these costs are higher in Scotland, especially in rural areas.

“The main levers lie with the UK government in alleviating the pain many are facing, and in last week’s mini-budget there was little focus on how to help those on lower incomes.

“However, the Scottish government has an important role to play, and has made positive steps in increasing the Scottish Child Payment. It could also use the increase in the block grant from the Treasury to enhance social security payments for groups most at risk including disabled people and larger families as well as expanding the Scottish Welfare Fund. Short-term support as well as longer-term measures are needed to prevent further hardship.”

Professor Sharon Collard, Chair in Personal Finance at the University of Bristol, said: “It is hugely concerning that so many Scottish households are going into winter worried about whether they can afford to turn their heating on. It is vital government offers more support to vulnerable groups, such as lone parents and disabled people who are least able to weather the coming financial storm.”

On Wednesday, the Scottish Government launched a website to help support households with the cost of living crisis with financial advice.

Launching the website social justice secretary Shona Robison said: “I know that people are struggling with the cost of living crisis right now and may not know where to turn for help. Our cost of living website is a trustworthy online resource with information on the wide range of vital support available.

“No one should feel alone in this crisis and this website, along with our campaign, aims to encourage people to find out if they are eligible for the extensive support available to access the advice they need. We want everyone to get all the financial support and help that is available so I would encourage people to apply for the payments they are entitled to – it might be just the lifeline that is needed right now.

“We have allocated almost £3 billion in this financial year to contribute towards mitigating the increased cost of living crisis and the new website highlights the wide range of support at hand. Our package spans a range of support, for energy bills, childcare, health and travel, as well as social security payments that are not available anywhere else in the UK. The website is an important signpost towards them all.

“The cost of living crisis is impacting every household in the UK and the Scottish Government will continue to do everything within its powers and finite budget to ensure people are supported as far as possible.”