Scottish election 2026: How tax and welfare are shaping the vote

Scottish Election 2026: Tax and Welfare at the Heart of the Campaign

The upcoming Scottish Parliament vote on 7 May is expected to focus heavily on fiscal policies and social support, marking a departure from traditional themes like healthcare and education. Over the past decade, Scotland has diverged from the rest of the UK in how it structures income tax and social security, a trend that has grown more pronounced since the SNP secured a majority in 2021 under Nicola Sturgeon.

Scotland’s Tax System: A Unique Structure

Every UK adult receives a personal tax allowance of £12,570, exempting them from income tax. However, Scotland now employs six distinct tax bands compared to the three used in England, Wales, and Northern Ireland. This system results in lower earners paying slightly less tax, while middle and higher income groups face significantly higher rates. The Institute for Fiscal Studies (IFS) estimates that 55% of Scottish taxpayers earning up to £33,500 annually will see a small financial benefit—no more than £40 per year (about 77p weekly)—compared to those in the rest of the UK. Conversely, earners above this threshold, such as someone making £50,000, will pay £1,500 more in Scotland, with the gap widening to £5,200 for those earning £125,000.

SNP’s Progressive Tax Narrative

The SNP government in Edinburgh frames its tax model as a tool for wealth redistribution, aiming to address deep-rooted inequalities in Scotland. However, some economists argue that the system’s abrupt tax rate increases may discourage work and economic growth. The IFS projects that the Scottish model could generate £1.8bn extra compared to UK policy, but the actual surplus is forecast to be around £1bn due to lower earnings growth and behavioral adjustments to higher taxes.

Welfare Policies and Real-Life Impact

For many Scots, the debate over taxation feels distant from daily struggles. Jenna Lindsay, a manager at Cafe Continental in Gourock, Inverclyde, admits she’s unsure if she’ll vote. “It’s full on,” she says. “You’re like, how am I working all this and I’ve got nothing to show for it? It’s hard.” She describes the pressure of rising taxes and living costs as overwhelming, noting that “everything’s going up.” Meanwhile, the SNP has expanded social security spending, including the Scottish Child Payment (SCP), which was initially £10 weekly per child under six and has since grown to £28.20, with eligibility extended to children under 15.

“It’s not like we’re choosing not to work and we’re just trying to live off the government,” says Laura Derrick, a mother of three in Inverclyde. “We’re doing the best we can, and that extra help really does make the difference.” Her family, which includes a three-month-old baby, relies on the SCP and UK child benefit to avoid financial hardship, as her husband’s job and her weekend night shifts as a carer leave little room for savings.

Child Poverty and Policy Challenges

The Joseph Rowntree Foundation (JRF) reports that 210,000 children, or roughly one in five, live in relative poverty in Scotland. This means their household income after housing costs falls below 60% of the UK’s median income. While the SNP has introduced measures to support families, critics argue that the system remains complex and may not fully address the scale of inequality. The 2026 election could determine whether these policies continue or shift toward alternative approaches.