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

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

The 2026 Scottish Parliament elections are poised to focus on fiscal policies, with tax and welfare becoming central issues. While past contests centered on education and healthcare, this year’s vote will also determine the future of Scotland’s financial framework, which has diverged from the rest of the UK since 2017. The shift gained momentum after the Scottish National Party (SNP) secured a majority in 2021 under Nicola Sturgeon, creating a unique opportunity for voters to evaluate the SNP’s approach and alternative proposals from rival parties.

Taxation Breakdown

Every UK adult receives a £12,570 personal tax-free allowance, but Scotland’s system introduces six distinct tax brackets compared to three in England, Wales, and Northern Ireland. This structure means lower earners in Scotland face slightly reduced tax burdens, while middle and higher earners pay significantly more. According to the Institute for Fiscal Studies (IFS), 55% of Scottish taxpayers earning up to £33,500 annually will see a small financial benefit over their UK counterparts, amounting to no more than £40 yearly (77p weekly). Conversely, those earning over £33,500 will pay extra, with someone on £50,000 facing an annual tax increase of about £1,500 and £125,000 earners paying roughly £5,200 more.

Progressive Tax or Economic Challenge?

The SNP defends its system as more progressive, aiming to redistribute wealth and address deep-rooted inequalities. However, economists question this claim, highlighting sharp tax rate increases that may discourage work and economic growth. The IFS estimates the Scottish model could generate £1.8bn extra than UK policy, but behavioural responses and slower wage growth in Scotland are expected to reduce the actual surplus to nearly £1bn.

“You’re like, how am I working all this and I’ve got nothing to show for it? It’s hard,” says Jenna Lindsay, manager of Cafe Continental in Gourock. “It’s probably just a mix of everything—wages, taxes, and the cost of living. Everything’s going up.”

Jenna Lindsay, who may not vote, reflects the frustration of many as the political debate feels distant from everyday struggles. For her, the focus on taxes overshadows the immediate pressures of managing a business and supporting a family. Similarly, Laura Derrick, a mother of three in Inverclyde, emphasizes the importance of welfare support. “Without the Scottish Child Payment and UK child benefit, we’d be really struggling,” she explains, noting that the payment has risen from £10 to £28.20 per week per child under six and now extends to children aged 15 and under.

Current SNP leader John Swinney has pledged to further boost the payment, targeting families with children under 12 months. This expansion underscores the party’s commitment to social security, though the Joseph Rowntree Foundation (JRF) reports that 210,000 Scottish children—just over 1 in 5—still live in relative poverty, defined as households earning less than 60% of the UK median income after housing costs. The debate over tax and welfare remains a key lens through which voters assess Scotland’s economic direction.