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

Scottish Election 2026: Tax and Welfare Policies Take Center Stage

The 2026 Scottish Parliament election marks a shift in focus, with tax and welfare policies taking center stage instead of traditional priorities like schools and hospitals. For years, the debate has centered on public services, but this year’s vote will determine the future of Scotland’s financial landscape under the Scottish National Party’s (SNP) leadership. The party’s approach to income tax and social security has diverged from the rest of the UK since 2017, and this gap has grown following their 2021 Holyrood election victory under Nicola Sturgeon.

Income Tax: A System with Six Rates

In the UK, every adult receives a £12,570 personal tax-free allowance. However, Scotland now employs six distinct income tax brackets, unlike the three used in England, Wales, and Northern Ireland. This structure results in lower earners paying less tax compared to other UK regions, while middle and higher earners contribute significantly more. According to the Institute for Fiscal Studies (IFS), 55% of Scottish taxpayers earning up to £33,500 annually will benefit financially this year, with savings estimated at £40 per year (77p weekly). Conversely, those earning over £33,500 face higher costs, with a £50,000 income incurring an additional £1,500 in taxes, and £125,000 leading to a £5,200 difference.

The SNP argues its tax system is more progressive, redistributing wealth to address deepening inequality. Critics, however, question this claim, citing abrupt tax rate increases that could deter work and growth. The IFS predicts the Scottish model would generate £1.8bn more in revenue than the UK system, but behavioral adjustments and slower earnings growth may limit this to nearly £1bn.

“It’s full on,” Jenna Lindsay says, reflecting on the pressures of daily life. She manages Cafe Continental in Gourock and admits she’s unsure if she’ll vote. “You’re like, how am I working all this and I’ve got nothing to show for it? It’s hard.”

Meanwhile, social security has seen expansion under SNP rule since 2007. A key example is the Scottish Child Payment (SCP), introduced in 2021 by Sturgeon. Initially £10 weekly per child under six, it’s now £28.20 for all children under 15. The current leader, John Swinney, plans to raise it further to £40 for infants under 12 months if the SNP wins the 7 May election.

Support for Child Benefits

Laura Derrick, a mother of three in Inverclyde, highlights the importance of such benefits. “It’s not like we’re choosing not to work and just living off the government,” she explains. “We’re doing the best we can, and that extra help really does make the difference.” Her family relies on both the SCP and UK child benefit to manage expenses, as her husband works and she covers 12-hour night shifts as a carer. They met at the Boglestone community center in Port Glasgow, funded by Scottish and UK governments, where other parents echoed similar sentiments.

The Joseph Rowntree Foundation (JRF) reports that 210,000 Scottish children, or just over 1 in 5, live in households below the poverty line. This means their income after housing costs falls below 60% of the UK median. As the election approaches, voters weigh these financial realities against the SNP’s vision of a fairer society and alternatives proposed by rival parties.