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

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

This year’s Scottish Parliament elections are set to focus on taxation and social support, marking a shift from traditional issues like education and healthcare. Since 2017, Scotland has developed a distinct fiscal approach compared to the rest of the UK, with the SNP’s leadership since 2007 driving significant changes. The 7 May vote offers voters a chance to assess the SNP’s policies and compare them to alternatives proposed by rival parties.

Under UK rules, all adults share a £12,570 tax-free allowance. However, Scotland’s system now divides taxable income into six bands, unlike the three tiers used in England, Wales, and Northern Ireland. This structure means lower earners in Scotland face slightly lower taxes, while middle and higher-income individuals pay more. The Institute for Fiscal Studies (IFS) notes that 55% of taxpayers earning up to £33,500 annually will benefit from this setup, though the gain is modest—no more than £40 yearly (about 77p weekly). For those earning over £33,500, the effect reverses, with someone on £50,000 paying £1,500 more in Scotland than elsewhere in the UK. The disparity grows to £5,200 for £125,000 earners.

The SNP frames its tax system as progressive, aiming to reduce inequality. Yet some economists argue the model’s abrupt tax rate increases could discourage earning potential. The IFS estimates the system could generate £1.8bn extra compared to UK policies, but behavioral factors and slower wage growth in Scotland may cut this to nearly £1bn.

A Voice from the Frontlines

“It’s full on,” says Jenna Lindsay, who runs Cafe Continental in Gourock. “You’re like, how am I working all this and I’ve got nothing to show for it? It’s hard.”

Lindsay, uncertain about voting, highlights the strain of rising living costs. “It’s probably just a mix of everything. You earn a wage, and then it all gets taken off—taxes and the cost of living. Everything’s going up.”

Support for Families Under Scrutiny

The SNP has expanded social security spending, including the Scottish Child Payment (SCP), introduced in 2021. Initially £10 weekly per child under six, the benefit now stands at £28.20, with eligibility extended to children under 15. John Swinney, current First Minister, plans to boost payments to £40 for infants under 12 months if the SNP secures victory.

Laura Derrick, a mother of three in Inverclyde, calls the SCP “really important.” “Without it and UK child benefit, we’d be struggling,” she explains. Her family, including a three-month-old, works long shifts but faces financial tightness. At a meeting in Port Glasgow’s Boglestone community centre, funded by both Scottish and UK governments, Derrick adds: “We’re not choosing to work less—we’re doing our best, and that extra help makes a real difference.”

Measuring Poverty in Scotland

The Joseph Rowntree Foundation (JRF) reports that 210,000 Scottish children, or roughly one in five, live in relative poverty. This means their household income after housing costs falls below 60% of the median UK level. These figures underscore the ongoing challenges in addressing inequality, a key focus of the SNP’s agenda.