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

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

Scotland’s Distinctive Fiscal Path

While Scottish Parliament elections have historically centered on education and healthcare, the 2026 vote marks a shift toward a focus on taxation and social support. Over the past decade, Scotland has diverged from the rest of the UK in how it structures income tax and social security policies. This divergence accelerated after the Scottish National Party (SNP) secured a majority in the 2021 Holyrood election under Nicola Sturgeon. The upcoming poll on 7 May offers voters a chance to assess the SNP’s direction and alternatives from other parties.

Every UK adult benefits from a £12,570 personal tax threshold. However, Scotland’s system now features six income tax brackets, compared to three in England, Wales, and Northern Ireland. This complexity means lower earners in Scotland face slightly lower tax burdens than elsewhere in the UK, while middle and higher earners pay more. The Institute for Fiscal Studies (IFS) estimates that 55% of Scottish taxpayers earning up to £33,500 annually will see a small financial gain over the rest of the UK, amounting to no more than £40 yearly (about 77p weekly). Conversely, those earning over £33,500, including £50,000 and £125,000, will pay £1,500 and £5,200 more, respectively.

The SNP’s Progressive Vision

The SNP government in Edinburgh frames its tax model as a tool to reduce inequality. By raising rates at key income thresholds, it aims to redirect wealth toward tackling poverty in Scotland, where disparities persist. Yet, some economists argue that the system’s abrupt tax rate jumps could discourage productivity, as higher taxes might make earning more seem less rewarding.

According to the IFS, the Scottish tax system is expected to generate £1.8bn more than the UK model in 2026/27. However, this figure may be slightly adjusted due to reduced economic activity and slower wage growth in the region. Despite these projections, the practical impact on everyday life remains a concern for many voters.

Real-Life Pressures on Voters

“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.” — Jenna Lindsay, manager of Cafe Continental in Gourock

Jenna Lindsay, who runs a bar and restaurant in Inverclyde, says the political discussion around taxes feels distant from her daily struggles. She admits uncertainty about whether she’ll vote, citing the difficulty of balancing work and rising living costs. “Everything’s going up—taxes and the cost of living. It’s a mix of everything,” she explains.

Meanwhile, Laura Derrick, a mother of three in Port Glasgow, highlights the importance of social security. The Scottish Child Payment (SCP), introduced by Sturgeon in 2021, has grown from £10 weekly per child under six to £28.20, with eligibility expanded to children under 15. If the SNP retains power, the payment will rise further to £40 for infants under 12 months. “Without it and UK child benefit, we’d be really struggling,” Laura says. Her family, including a three-month-old baby, relies on the SCP to manage expenses, despite both parents working full-time.

Addressing Child Poverty

The Joseph Rowntree Foundation (JRF) reports that 210,000 children in Scotland live in relative poverty, defined as households with income after housing costs below 60% of the UK median. This underscores the role of social welfare in sustaining families. The SNP’s expanded benefits and targeted tax policies are seen as critical in addressing these challenges, though their long-term effectiveness remains a topic of debate among economists and voters alike.