Press Release: the cost of living is driving difficult choices
Tuesday 23rd May 2023
New research reveals in order to meet increased costs, many Scots are running down their savings, turning to credit and stopping paying into pensions:
4 in 10 Scots (42%) report having taken money out of their savings to cover higher costs
1 in 4 have used a credit card to make for purchases that they wouldn’t usually
1 in 5 have used ‘buy now pay later’ schemes to cover everyday spending
A small but increasing number of Scots have stopped contributing to a pension (7%).
The research also found
7 in 10 (68%) 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 two-thirds (66)% report reducing spending on non-essential purchases such as clothing
turning to high-cost borrowing options for everyday essentials can cause the accumulation of substantial debt which will affect their lives for many years to come
the economic outlook from Scots remains bleak with 62% thinking that general economic conditions will be worse in a years’ time (although this is down very slightly from 66% in February) and 45% think their personal financial situation will be worse in a years’ time (down from 48% in February)
however, while we have seen a reduction in the number of people thinking that things will get worse, optimism is not rising. Rather, many Scots think that the economic outlook will remain the same over the next 12 months suggesting they think that the costs and challenges they face are here to stay.
This wave of the Understanding Scotland: Economy tracker survey was produced in partnership between the David Hume Institute and the Diffley Partnership. The survey gathers economic attitudes and insights from more than 2,000 members of the Scottish adult population every 3 months to track changes over time.
Mark Diffley, Founder and Director of Diffley Partnership, said:
“Despite some economic indicators showing signs of stabilising over recent times and some commentators predicting that the worst of the crisis maybe easing, it is clear that Scots are still feeling pessimistic about the prospects for both their own finances and the wider economy. Our survey once again highlights the financial and wider impacts being caused by the crisis and that the most significant impacts are being felt by the most financially vulnerable.”
Susan Murray, Director of the David Hume Institute said:
“Sadly this research continues to show a stark picture for the Scottish economy. Two-thirds of people continue to cut down on non-essential purchases and almost half the population are reducing their donation to charity. 1 in 5 people, with nothing left to cut back, are turning to high cost borrowing in order to survive. Others are telling us they have stopped contributing to their pension in order to make ends meet. These actions today, are likely to impact personal finances and the Scottish economy for many years to come.”
Understanding Scotland is a quarterly tracker survey 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.
Notes to editors:
The survey received 2,184 responses from a representative sample of the adult population, aged 16+, across Scotland. Invitations were issued online using the ScotPulse panel, and fieldwork was conducted between the 2nd and 8th May 2023. Results are weighted to the Scottish population (2020 estimates) by age and sex.
About Understanding Scotland: Understanding Scotland is a high-quality quarterly survey that delivers insights into Scottish behaviours and attitudes towards society, the economy and the environment. The survey fills a vital gap in research, providing the socioeconomic insights and indicators needed for effective decision-making, with regularity and timeliness.
About the Diffley Partnership: The Diffley Partnership is an Edinburgh-based consultancy and research company working with organisations across the public, private and third sectors to deliver high quality research and insight on a range of issues using all qualitative and quantitative techniques.
About the David Hume Institute: The David Hume Institute is an independent think tank with a mission to improve understanding of the economy in Scotland. We carry out research and host public events on a range of issues related to the Scottish economy and society.
About Charlotte Street Partners: Charlotte Street Partners is a strategic communications agency based in Edinburgh. Our team of advisers offer considerable experience, expertise, and insight across all aspects of communication.
