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

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

The 2026 Scottish Parliament election marks a significant shift in focus, with tax policies and welfare provisions taking center stage. While public services like education and healthcare have traditionally been key issues, the current political landscape is shaped by Scotland’s distinct approach to income taxation and social security. This divergence began in 2017 and has become more pronounced since the Scottish National Party (SNP) secured a mandate in the 2021 Holyrood vote under Nicola Sturgeon.

Distinct Tax Bands in Scotland

Every adult in the UK enjoys a personal tax-free allowance of £12,570. However, Scotland’s system has expanded this into six tiers, unlike the three bands used in England, Wales, and Northern Ireland. This structure means lower earners in Scotland face slightly reduced tax burdens compared to the rest of the UK, while middle and higher income groups pay significantly more. According to the Institute for Fiscal Studies (IFS), 55% of Scottish taxpayers earning up to £33,500 annually will see a marginal financial gain over their UK counterparts—no more than £40 per year (about 77p weekly). Conversely, those earning over £33,500 will pay an extra £1,500 per year at the £50,000 level and up to £5,200 at the £125,000 bracket.

Progressive Taxation or Economic Concerns?

The SNP government in Edinburgh argues that its tax model is more progressive, redistributing wealth to combat deep-rooted inequalities. However, some economists question this, highlighting abrupt increases in tax rates as income rises. These jumps, they claim, could discourage people from working harder or earning more, potentially slowing economic growth. The IFS estimates the Scottish system could generate £1.8bn extra compared to UK policy, but behavioral factors and Scotland’s sluggish wage growth are expected to reduce this to nearly £1bn.

Real-Life Struggles Amid Political Debates

For Jenna Lindsay, the tax debate feels distant from her daily challenges. Managing Cafe Continental in Gourock, she admits uncertainty about voting. “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 balancing wages with taxes and rising living costs, where “everything’s going up.”

Meanwhile, in Inverclyde, Laura Derrick shares similar concerns. Living with her husband and three children—including a three-month-old—she emphasizes the importance of the Scottish Child Payment (SCP). Introduced by Sturgeon in 2021, the benefit initially offered £10 weekly per child under six but has since risen to £28.20 and expanded to include children under 15. Current SNP leader John Swinney proposes further increases to £40 for families with infants if his party retains power.

Derrick, who works 12-hour night shifts as a carer, says the SCP is “really important.” Without it, combined with UK child benefit, her family would “really struggle.” She met with other local mothers at Port Glasgow’s Boglestone community centre, a joint initiative of Inverclyde Council and both Scottish and UK governments. “We’re not choosing not to work and live off the state,” she explains.

“We’re doing the best we can, and that extra help really does make the difference.”

Welfare Support and Poverty Rates

The Joseph Rowntree Foundation (JRF) reports that 210,000 children—over one in five—live in relative poverty in Scotland. This is defined as households with income after housing costs below 60% of the UK’s median earnings. The SNP’s welfare policies, including expanded child payments, aim to address these disparities, but the broader economic context continues to weigh on families across the country.