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The Financial Wellbeing of Scottish Households: Navigating the cost of living crisis

Evidence type: Insight i


Since early 2020, abrdn Financial Fairness Trust has commissioned periodic cross-sectional surveys to track the financial wellbeing of UK households. Initially, the context for these surveys was the impact of the coronavirus pandemic. More recently the focus has turned to the impact of the cost-of-living crisis. The context for households is different in Scotland from other areas of the UK because, in addition to the financial support to households provided by UK Government, the Scottish Government has announced extra help for households, including specific measures to support low-income households.

The study

This quantitative study involved a cross-sectional survey undertaken by the University of Bristol and YouGov in autumn 2022. It was the seventh survey in a series of cross-sectional surveys funded by abrdrn Financial Fairness Trust which aimed to track the impact of the coronavirus pandemic and the subsequent cost-of-living crisis on the finances of UK households, with a specific focus on households’ income, bill payment, borrowing and debt, savings and their ability to pay for other essentials.

The sample of 6,108 UK respondents, including 552 in Scotland, who were responsible for their households’ finances were randomly selected to take part in the survey from YouGov’s online panel. The analysis drew on a segmentation (i.e. classification) of households into four categories (‘in serious financial difficulties’, ‘struggling’, ‘exposed’ and ‘secure’) that was based on the results of a principal component analysis of several questions about households’ ability to meet financial obligations and their capacity to deal with an economic shock. The results of another, similar principal component analysis estimated households’ future outlook for the next three months.

Key findings

The study reports findings that are statistically significant (where p<.05), except where stated.

  • Overall financial wellbeing: 21% of households (more than half a million households and 1.2 million people) in Scotland were in the ‘serious financial difficulties’ segment, compared with 17% of households in the rest of the UK. The difference was no longer statistically significant when household income was taken into account.
    • Among working-age households, the figure was 26% in Scotland, compared with 19% in the rest of the UK. Conversely, 19% of working-age households in Scotland were financially secure (vs 23%).
    • Among households in which the respondent was of state pension age (66 or over), 7% were in in serious financial difficulties in Scotland and the rest of the UK. However, 40% in Scotland were secure (vs 47% in the rest of the UK).
    • Analysis of trends shows a large increase in the proportion of households who were in series financial difficulties between October 2021 and June 2022 in both Scotland (from 13% to 21%) and the rest of the UK (10% to 16%).
    • 34% of people in working-age households in Scotland were ‘very worried’ about their financial situation in the next 12 months (vs 23% in the rest of the UK).
  • Struggling with finances: 24% of households in Scotland found it was a constant struggle to pay bills, compared with 20% in the rest of the UK.
    • 30% were behind with payments on at least one bill (vs 26%).
    • 34% of respondents in Scotland said that thinking about their finances made them anxious (vs 30%).
  • Impacts of the cost-of-living crisis: 53% of households in Scotland in which the respondent was of working age said they had found it harder to keep their home warm and comfortable since January 2022.
    • 49% felt less able to afford holidays or breaks away from home
    • 46% had eaten poorer quality food than previously
    • 93% of all households in Scotland had taken at least one action to minimise their energy bills, most often by avoiding turning the heating on (80%).

Points to consider

  • Methodological strengths/weaknesses: The authors do not specify how representative YouGov’s online panel (i.e. the sample universe) is of the population of the UK or if weighting was used to correct for differences in the resulting sample.
    • The report gives the numbers of households (and people) who are affected by key measures of interest. It is important to note that these are point estimates which, like percentages, are subject to margins of error, but which may be subject to further error depending on the quality and timeliness of the underlying population statistics used to estimate them.
    • Where the report describes the results of sub-groups (such as working-age households), the sample sizes are smaller than those quoted here (see the report for detailed base sample sizes).
  • Relevance: The findings will be of relevance to anyone with a policy, research, practice or lay interest in the financial wellbeing of households in the UK (and Scotland specifically) particularly in the context of difficult economic times.
  • Applicability: By limiting the sample to respondents who had some responsibility for their households finances (to represent their households effectively), the authors have ensured that the findings apply appropriately to UK households and therefore have good ecological validity. However, they might not apply well to some types of households, particularly multi-generational households in which the details of other adults’ finances, such as adult children, are not readily available to the household representative.
    • Due to the influence of government policies and contexts that are specific to the UK, the findings are of limited applicability to countries outside of the UK, although the study approach is nonetheless applicable.
  • Generalisability/transferability: Analysis was tested for statistical significance and margins of error were considered at the p<.05 level. Notwithstanding the representativeness of the sample universe and the resulting sample (noted above), this suggests that the findings are generalisable to the population.

Key info

Year of publication
United Kingdom, Scotland
Contact information

Jamie Evans and Sharon Collard, Personal Finance Research Centre, University of Bristol, www.bristol.ac.uk/pfrc