Scottish election 2026: How tax and welfare are shaping the vote
Scottish Election 2026: Tax and Welfare as Key Issues
While Scottish parliamentary elections have traditionally centered on education and healthcare, the 2026 vote is expected to hinge on tax policies and social welfare. Over the past decade, Scotland has diverged from the rest of the UK in its approach to income tax and social security. This shift began in 2017 but intensified after the Scottish National Party secured a Holyrood election victory under Nicola Sturgeon in 2021. The upcoming poll on Thursday, 7 May, offers voters a chance to assess the SNP’s policies and alternatives proposed by other parties.
Every UK adult receives a personal tax allowance of £12,570, exempting them from income tax. However, Scotland now employs six distinct tax brackets, compared to three in England, Wales, and Northern Ireland. This structure means lower earners in Scotland face slightly reduced tax burdens, while middle and higher earners pay significantly more. The Institute for Fiscal Studies (IFS) estimates that 55% of taxpayers earning up to £33,500 annually will benefit financially this year, though the maximum gain is limited to £40 per year—or approximately 77p weekly. Conversely, 45% of Scottish taxpayers with incomes exceeding £33,500 will pay more than their UK counterparts, with a £50,000 earner paying around £1,500 extra in income tax. This gap widens further for those earning £125,000, where the difference could reach up to £5,200.
“It’s full on. You’re like, how am I working all this and I’ve got nothing to show for it? It’s hard,” says Jenna Lindsay, manager of Cafe Continental in Gourock, Inverclyde. For her, the political debate on taxation feels distant from the daily pressures of managing household finances. “It’s probably just a mix of everything. You earn a wage and then it all just gets taken off you—taxes and then the cost of living. Everything’s going up.”
The SNP, which has governed Scotland since 2007, has also expanded social security spending. In 2021, Nicola Sturgeon introduced the Scottish Child Payment (SCP), a benefit for low-income families. Initially set at £10 per week per child under six, the payment has since increased to £28.20 and extended to children under 15. Current SNP leader John Swinney has announced plans to boost it to £40 for families with children under 12 months, should his party retain power.
Laura Derrick, a mother of three in Inverclyde, including a three-month-old, emphasizes the SCP’s importance. “Without it—and UK child benefit—our family would be really struggling,” she says. She works 12-hour night shifts as a carer, and her husband is employed, yet they find it challenging to cover basic expenses. At a meeting with other parents at the Boglestone community centre in Port Glasgow, funded by both Scottish and UK governments, she adds, “It’s not like we’re choosing not to work and just relying on the state. We’re doing the best we can, and that extra support really does make the difference.”
The Joseph Rowntree Foundation (JRF) estimates that 210,000 Scottish children, or just over one in five, live in relative poverty. This means their household income after housing costs falls below 60% of the median UK income. The SNP’s policy of increasing welfare benefits aims to address these inequalities, though some economists argue the tax system’s abrupt rate changes may deter economic growth by discouraging higher earnings.