Context

The Financial Fairness Tracker study is a partnership between the University of Bristol's Personal Finance Research Centre and abrdn Financial Fairness Trust. Twice each year, people from across the UK are asked about how their personal and household finances have been affected by the economy. This report focuses on the findings of the 11th edition of the Financial Fairness Tracker in relation to Scotland.

At the time of the Tracker's 11th edition in Autumn 2024, many households across the UK were expecting to be worse off. The Scottish Government subsequently indicated that taxpayers earning below £30,300 would pay slightly less income tax in Scotland than elsewhere in the UK, albeit against a backdrop of higher Council Tax, stagnating child poverty rates, freezes in the Scottish Welfare Fund and reduced funding for social security advice.

The study

The survey was designed and the analysis was undertaken by the Personal Finance Research Centre with funding from abrdn Financial Fairness Trust. Addressing the picture in Scotland in November 2024, the study explored:

• the financial wellbeing of households and how they were managing to make ends meet
• attitudes to the UK Budget and Scottish Government policies
• how households felt about their financial futures.

The data were collected online using Opinium's nationally and politically representative cross-sectional survey panel, providing a UK-wide sample of 6,197 households represented by a householder (defined as someone with some responsibility for their household's finances). The UK sample included a representative sample of 880 households in Scotland, supported by a booster sample of 500 householders in Scotland.

Key findings

All reported differences between groups were significant at the 95% level of statistical confidence (p<.05).

Financial wellbeing in 2024

• 18% of households in Scotland were in 'serious financial difficulties' (higher than in the rest of the UK, 15%)
• 20% were 'currently struggling to pay for food or other necessities'
• 32% had no savings (higher than for the rest of the UK, 23%, and this gap was bigger compared with 2023)
• 22% would need to borrow immediately if their household income fell by a third (higher than in 2023, 19%, and higher in Scotland in 2024 than the rest of the UK, 18%).

Affordability of energy costs

• 36% of households in Scotland found their energy bills were 'unaffordable' (lower than in 2022, 56%)
• 51% avoided turning on the heating as much as usual.

Impacts of financial pressures

• 36% of households in Scotland felt no control over their financial situation
• 35% slept poorly and 37% reported deteriorated mental health as a result of financial worries causing them to sleep poorly at night
• 24% had received financial help from their family or friends in the last six months (higher than in the rest of the UK, 20%)
• 3% had accessed a food bank in the previous four weeks.

Attitudes towards government policies

• 37% expected the UK Budget to make 'no noticeable' financial impact on the over the next 12 months (higher than in the rest of the UK, 32%)
• 52% felt tax rises announced to improve public services were 'necessary'
• on a range of questions about other announced UK or Scottish policies, households in Scotland were typically more supportive of tax rises than those in the rest of the UK.

Expectations for the future

• 14% were 'very worried' and a further 30% were 'quite worried' about their overall financial situation in the next 12 months
• 20% lacked confidence in their finances for the subsequent three months (lower than in 2022, 39%).

Points to consider

Methodological strengths or limitations

• The authors describe the samples as being designed to be nationally representative but do not detail the sampling or weighting strategies or population characteristics underlying this.
• The findings presented are largely descriptive. For example, multivariate methods of analysis were not used.
• Widespread statistical significance testing of differences nonetheless supports the rigour of the findings presented.

Applicability

• The report should be of interest to policymakers and advocates of household financial wellbeing in the Scottish context.

Relevance

• The report is relevant and timely given the rapidly changing UK economic landscape since 2020 (including the impacts of Covid-19 policies and the cost-of-living crisis) as well as the political and policy developments in the UK and Scotland specifically in 2024.