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As freezing temperatures hit Scotland, 4 in 10 households consider energy costs ‘unaffordable’

Press release issued: 18 January 2024

New research has revealed 38% of households in Scotland recently described their energy bills as ‘unaffordable’ and more than half (51%) considered them only ‘somewhat affordable.’

The Financial Fairness Tracker, commissioned by the abrdn Financial Fairness Trust and analysed by a team at the University of Bristol, has been monitoring the personal finances of UK households since the start of the pandemic.  

Nearly seven-in-eight Scottish households (85%) have taken some form of action in the past six months to help them afford their energy bills. Most commonly they have avoided turning on the heating or turned it on less than usual (57%), while it has also become routine for Scots to wear more clothes than usual to keep warm indoors (53%). Other notable actions taken to reduce energy costs included: reducing use of their cooker or oven (38%), reducing the number of showers or baths taken (27%), and cutting back spending on food (24%).

These levels are lower than when people were asked the same question a year ago, when the February 2023 Financial Fairness Tracker found more Scottish households were avoiding turning on the heating (80%) and reducing use of the cooker or oven (51%). This suggests some people are getting used to higher energy costs or may have found ways to absorb them within their household budgets.

Around one-in-six (17%) households in Scotland – nearly 450,000 households – are ‘in serious financial difficulties’, meaning it is a real struggle for them to meet their day-to-day expenses, with many behind on their household bills or credit commitments. This matches the level of serious financial difficulties across the rest of the UK (17%).

Of those currently paying rent or a mortgage in Scotland, over half (55%) have seen these costs increase within the last six months. Scottish mortgagors (approximately 700,000 households) were more likely than other tenure groups to have seen their housing costs increase by more than £100 per month (36%, compared with 13% of the 400,000 or so private rented households and 12% of the 600,000 social rented households).

Financial difficulties are taking a toll on households’ health and wellbeing as well. Nearly two-in-five Scottish householders (38%) felt their financial situation was making their mental health worse; and a similar proportion felt financial worries were causing them to sleep poorly (37%). These levels are similar to the rest of the UK (40% for mental health impacts and 39% for sleep impacts).

The research also found Scottish households had less of a financial cushion to deal with crises than those in the rest of the UK. Scottish households are more likely to have nothing in savings (29%, compared with 26% for the rest of the UK). This gap rises considerably for those in the bottom income quintile (55% in Scotland, compared with 43% in the rest of the UK).

Conversely, lower-income Scottish households were less likely to have taken out new credit (48% compared with 61% in the rest of the UK), or to have borrowed money for daily living expenses in the past six months (28% compared with 44%). These findings may reflect lower absolute incomes in Scotland relative to the rest of the UK (driven primarily by England), before housing costs are accounted for, which may make it more challenging for lower-income Scottish households to access credit. 

Looking ahead to the coming year, around half (47%) of all households in Scotland were ‘very’ or ‘quite worried’ about their overall financial situation over the next 12 months.

Professor Sharon Collard, Chair in Personal Finance at the University of Bristol, said: “Our analysis shows there is a long way to go before lower-income households in Scotland feel the benefit of investment to improve living standards and tackle child poverty.

“The rural-urban divide is particularly striking, with households in large urban areas performing worse on all our financial indicators compared to rural households. Households in the most deprived areas are over four times more likely to be in financial difficulties (31% compared with 7%) and nearly twice as likely to be losing sleep over their finances (51% compared with 28%) than those in rural areas.”

Mubin Haq, CEO of abrdn Financial Fairness Trust, said: “With temperatures plummeting below freezing this week many of us will worry about our energy bills soaring. For those on the lowest incomes the problem is significant as energy bills make up a much greater proportion of their household budget. Whilst for some the cost of living crisis is over, for others it has become more acute. The knock-on mental and physical health problems for people worrying about affording the basic essentials such as heating should concern us all.

“It is vital that those on lower incomes are protected but our findings show there is a long way to go. Government can help by incentivising more people to save, improving access to low-cost credit and investing in home insultation for those on the lowest incomes.”

Further information

The Financial Fairness Tracker

This analysis is based on data taken from an Opinium survey of 6,067 households across the UK of which 896 households were in Scotland. It was commissioned by abrdn Financial Fairness Trust for its financial impact tracker series, conducted in October 2023 and analysed by the Personal Finance Research Centre (University of Bristol). This is the 9th wave of the survey.

abrdn Financial Fairness Trust 

abrdn Financial Fairness Trust funds research, policy work and campaigning activities to tackle financial problems and improve living standards for people on low-to-middle incomes in the UK. It is an independent charitable trust registered in Scotland.



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