Our latest Understanding Scotland: Economy report continues to shine a light on people’s attitudes to the economy and their concerns about the cost of living.
While levels of pessimism about the economy and individual financial circumstances have marginally improved in the last three months, there is continuing, and considerable hardship being experienced by many Scots.
The priorities of Scots remain consistent with previous waves; healthcare and the NHS remains the top priority, closely followed by the cost of living and inflation.
However, the issue of trust in politics has risen as a priority among Scots and is now in the top five of all issues, with 18% including the issue in their top three priorities.
There continues to be widespread concern among Scots that economic conditions and individual financial circumstances are worse than 12 months ago and will be worse again in 12 months’ time.
Although the majority of people remain pessimistic about whether these conditions will improve over the next 12 months, the depth of the pessimism has reduced very slightly. Whether this translates into optimism or the acceptance of a new normal in economic terms will be something to monitor in coming waves.
In line with previous waves of Understanding Scotland, we find that the impact of the economic crisis is being felt disproportionately across the population, with younger people and those living in Scotland’s most deprived communities being the most likely to report significant negative impacts. With many people in these groups turning to high cost borrowing options for everyday essentials, they are likely to be accumulating substantial debt which will affect their lives for many years to come.
This report explores these, and other economy related issues as we continue to monitor and analyse how the public is thinking and behaving during these uncertain times.
This edition of Understanding Scotland brings you insights from over 2,000 members of the adult (16+) Scottish public on the most important aspects of our society and economy.
A majority of Scots think that Scotland is heading in the wrong direction.
58% of Scots feel that things in Scotland are heading in the wrong direction. This is the highest on record and is the fifth consecutive wave in which this figure has increased. A record low proportion (24%) think that Scotland is moving in the right direction.
The public continues to feel that general economic conditions are worse than a year ago…
More than eight in ten Scots (84%) think that economic conditions are worse than they
were a year ago. This is marginally lower than the 88% figure reported in February 2023 and a significant decrease from the 94% figure reported in November 2022.
…And that their personal finances have worsened.
Six in ten (60%) Scots believe that their own personal financial situation has got worse in the last 12 months, down from 63% in February 2023.
Most Scots don’t expect an improvement.
The majority of people remain pessimistic about the way in which general and personal economic conditions will change over the next 12 months. Less than 1 in 10 (9%) predict that general economic conditions will be better, and only 13% expect their own financial circumstances to improve, in the next 12 months. Nearly half (45%) think that they will be worse off in 12 months’ time.
Pessimism is slightly down, but optimism isn’t rising.
Across indicators, the proportion of Scots that believe general and personal economic conditions will get worse has dropped for the second consecutive wave, from 66% to 62% for general conditions and from 48% to 45% for personal finances. However, more Scots are predicting that conditions will remain the same, rather than improve.
People remain dissatisfied with the adequacy of their income.
The majority of people report being dissatisfied with their income covering the cost of living (56%) while one in four (25%) report being satisfied that their income covers the cost of living. This level of dissatisfaction is followed closely by dissatisfaction with income level in general (43%) and people’s ability to meet their household bills (43%). The time series data demonstrates that work and income satisfaction levels have remained relatively stable since the last point of data collection in February 2023.
We are continuing to cut back spending.
Two-thirds of people (66%) report cutting down on non-essential purchases. In addition to this, significant proportions of people continue to put less money into their savings (46%), reduce charity donations (45%), take money out of savings to cover higher costs (42%), use a credit card for purchases that they wouldn’t usually (24%) and use buy now pay later schemes to cover spending (19%). Turning to high-cost borrowing options for everyday essentials, they are likely to be accumulating substantial debt which will affect their lives for many years to come.
The cost of living continues to dominate economic priorities…
Overall, the public’s economic priorities have remained stable with over two-third of Scots citing the cost of living and inflation (69%) among their top economic priorities. This is the highest prevalence of a priority ever recorded in the Understanding Scotland series. The public also continues to emphasise living standards and wages (42%), poverty (31%), spending on public services (24%), and managing public finances (22%) as top issues for the Scottish economy.
…And healthcare and the cost of living remain top of the agenda.
Healthcare and the cost of living continue to dominate public priorities, separated by one percentage point with 47% of Scottish adults citing healthcare and the NHS (down from 52% in February) as one of the top three issues facing Scotland and 46% citing the cost of living.
Trust in politics is growing as a priority issue.
More Scots are stating that trust in politics is an important issue facing Scotland, rising from 15% citing this as one of the top three issues facing Scotland in February to 18% in May 2023. The equivalent figure for May 2022 was 13%.