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

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

The 2026 Scottish Parliament elections are shifting focus from traditional issues like schools and hospitals to tax and welfare policies. Scotland has diverged from the rest of the UK in its approach to income tax and social security, a trend that began in 2017 and intensified after the Scottish National Party secured a majority in the 2021 Holyrood vote under Nicola Sturgeon. This year’s ballot, on Thursday 7 May, offers voters a chance to evaluate the SNP’s governance and alternative proposals from competing parties.

Tax System Differences and Their Impact

Every UK adult enjoys a £12,570 personal tax-free allowance. However, Scotland now employs six distinct income tax brackets, unlike the three 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 high earners pay more. The Institute for Fiscal Studies (IFS) estimates that 55% of Scottish taxpayers earning up to £33,500 annually will see a financial benefit of less than £40 per year (77p weekly). Conversely, those earning over £33,500 will pay additional taxes—up to £1,500 for someone on £50,000 and £5,200 for an income of £125,000.

Social Security and the Scottish Child Payment

The SNP has expanded social security spending, notably through the Scottish Child Payment (SCP), introduced in 2021 by Sturgeon. Initially £10 weekly per child under six, the benefit has risen to £28.20 and now covers children up to 15 years old. Current leader John Swinney plans to increase the SCP to £40 for infants under 12 months if the party retains power. For Laura Derrick, a mother of three in Inverclyde, this support is vital. “Without it, and UK child benefit, we’d be really struggling,” she says, highlighting the financial strain of raising a family with weekend night shifts and fluctuating incomes.

Public Perception and Voter Engagement

For Jenna Lindsay, owner of Cafe Continental in Gourock, the tax debate feels distant from daily challenges. “It’s full on,” she comments. “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 against rising taxes and living costs. The SNP frames its tax system as more progressive, aiming to address deep-rooted inequalities. Yet some economists question this narrative, arguing the system’s abrupt tax rate increases may deter people from earning more, potentially slowing economic growth.

Child Poverty Statistics

The Joseph Rowntree Foundation (JRF) reports that 210,000 children—over one in five—live in relative poverty in Scotland. This classification applies to households where income after housing costs falls below 60% of the UK median. The SNP’s policies, including the SCP, are seen by some as critical in alleviating this issue. However, the IFS notes that the Scottish tax system’s projected revenue surplus of £1.8bn in 2026/27 is likely to be reduced to just under £1bn due to behavioral responses and slower wage growth.

As the election approaches, these policies will play a central role in shaping voter decisions, reflecting both the ambitions of the SNP and the practical concerns of everyday citizens. The outcome may determine whether Scotland continues its unique fiscal path or returns to a more UK-aligned model.