Scots’ pessimism about economic conditions remains

Susan Murray (Director of the David Hume Institute)

SCOTS’ pessimism about economic conditions remains, but the tide could be turning…

  • Almost nine in ten (88%) Scots think that economic conditions are worse than they were a year ago. While two thirds (66%) of Scots say economic conditions will get worse in the next 12 months, this figure has dropped from 81% expressing the same sentiment in November 2022, starting what could be the beginning of an upswing in public opinion on the topic.
  • On the other hand, a majority (55%) of people believe Scotland is heading in the wrong direction. This is the first time a majority of people have expressed this opinion since Understanding Scotland began.
  • A quarter (25%) of people are not confident they would be able to pay for an emergency expense of £100 without having to take out a loan or borrowing money, pointing to an alarming level of financial precarity in Scottish households.
  • Seven in ten (69%) people report that they have cut their energy use through methods like switching off lights and not using the oven to cope with rising prices and inflation, and 68% report reducing spending on non-essential purchases such as clothing.

This iteration of the Understanding Scotland: Economy series was produced in partnership between the David Hume Institute and the Diffley Partnership. The survey gathered economic attitudes and insights from more than 2,000 members of the Scottish adult population.

Fieldwork was conducted the week prior to Nicola Sturgeon’s resignation, with results providing a snapshot of public opinion at the outset of the ongoing SNP leadership campaign rather than following the announcement of the First Minister’s resignation. 

The new Understanding Scotland polling reveals a mixed picture of public opinion on the economy: while overwhelming pessimism and evidence of harsh financial realities for households persist, people’s predictions for the next year appear less dire than in previous waves of data collection.

Scotland’s Challenges…

The majority of people (52%) identify healthcare and the NHS as one of the three most important issues facing Scotland today. This is followed closely by the cost-of-living crisis (45%). There has been increased interest in education and schools as a key issue (cited by 15% of respondents compared to 9% in November 2022), correlating with coverage of strike action in the media recently. Interest in other topics covered in the media, such as gender recognition reforms is limited: only 6% of respondents view this as one of the top three issues facing Scotland.

Scots continue to struggle to make ends meet as costs rise. Almost six in ten (58%) people report dissatisfaction with their income covering the cost of living, and 46% are dissatisfied with their ability to meet household bills. Most people continue to report taking action to reduce spending both in and out of home: 60% report not turning the heating on when they otherwise would have done to save money and 61% report cutting down on leisure activities in response to rising prices and inflation. One in five (20%) have cut down on meal/portion sizes to save money and almost a quarter (24%) have lost sleep due to stress or anxiety about personal finances.

Additionally, labour market activity continues to be shaped in reaction to rising prices: one in five (20%) of people have changed or looked at changing jobs to earn more money, 12% have taken on more hours or paid work, and 7% have tried, unsuccessfully, to take on more hours/paid work.

Felt unequally…

Financial fragility is not felt equally by the population. While a quarter of Scots are not confident that they could pay an emergency expense of £100 without having to borrow or take out a loan, this rises to over a third (36%) of households with children and 46% of households in the most deprived areas. For an emergency expense of £500 uncertainty in the ability to pay out of pocket rises to 45% of all households, 60% of households with children, and 66% of households in the most deprived areas. 

In response to the cost of living crisis, people are being forced to engage in risky financial behaviours which could lead to increased financial fragility in future: over four in ten (42%) have taken money out of savings to cover higher costs, 41% put less money than usual into savings (with an additional 5% having stopped paying into a pension), all while a similar proportion (43%) have reduced their donations to charity. With a quarter (25%) of people using credit cards when they otherwise would not have done and almost a fifth (18%) using ‘buy now pay later’ payment plans, the debt accrued during the cost-of-living crisis could extend its impact on the most financially vulnerable in Scotland. Nonetheless, just over half (52%) of people have hope that their own financial situation will, at the very least, not worsen in the next year.

This wave of Understanding Scotland paints a challenging picture as Scotland gets set to welcome a new First Minister: the cost-of-living crisis continues to impact everyday behaviours, and healthcare and rising prices remain at the top of the public’s priorities. Nonetheless, amidst widespread disillusionment, a slight glimmer of reduced pessimism for the future in terms of the economy can be found.

Mark Diffley, Founder and Director of Diffley Partnership, said:

“It is clear that the ongoing cost of living crisis is still being felt acutely, and unequally, across Scotland. As we have seen in previous surveys, the impacts of the crisis go beyond immediate financial concerns and continue to have impacts on employment, health and levels of anxiety. A new question on being able to deal with unexpected bills reveals significant unevenness in financial resilience, illustrating that while more than 4 in 10 of the population would not be confident of meeting an unexpected bill of £500, this rises to two-thirds of those who live in Scotland’s most deprived communities.”

Susan Murray, Director of the David Hume Institute, said:

“The survey shows a significant number of Scots continue to be unable to cope with the everyday cost of living and are losing sleep over their finances. Even more are unable to cope with an unexpected bill or emergency costs. These results should not be taken lightly. If people are too tired or stressed to concentrate at work, the economy as well as individuals suffer. Living in acute stress affects people’s health and public spending, with the NHS likely to bear the brunt.” 

Understanding Scotland is a quarterly survey tool measuring the most important facets of our lives and decision-making in Scotland: our society, economy, and environment developed by Diffley Partnership and Charlotte Street Partners. Understanding Scotland: Economy is produced in partnership with the David Hume Institute.

The full report can be found here.

The David Hume Institute is hosting a free public event to discuss the findings of the report tomorrow [Wednesday 1st March]. Further details can be found here.

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