Scottish Government People's Panel 2026-27 Event 3: The Cost of Living

Key findings

This report presents findings from a meeting of the Scottish Government People’s Panel 2026-27, a research panel of 40 members of the public recruited to broadly reflect the diversity of Scotland’s population. The session was held on 4 June 2026 and involved a full day of facilitated discussions on the cost of living. As part of this, members considered questions on topics including the impacts of rising costs; experiences of available support; and policy ideas and proposals for targeted support with energy costs and for caps on food prices. A total of 35 panel members attended all or part of the session.

Experiences of rising costs

• Panel members consistently described experiencing rising costs as a long-term and cumulative pressure. Food, energy, housing and transport costs were all identified as significant sources of strain, with many feeling that their incomes had not kept pace with rising prices.
• Cost-of-living pressures were impacting on all groups, not just those on low incomes. Financial pressures were described as affecting a wide range of households, including some who would not traditionally consider themselves financially ‘vulnerable’. Members frequently highlighted the position of those who are above eligibility thresholds for support but still struggling to manage rising costs.
• Many members described adapting their spending, shopping and travel habits in response to rising costs. Some panel members were rethinking major life decisions such as having children, moving out of the family home or starting a business.
• Panel members described a range of impacts on health and wellbeing. For example, reduced spending on social and leisure activities was associated with increased isolation and fewer opportunities for connection and relaxation.
• Panel members expressed concerns about the longer-term implications of rising costs, including impacts on retirement, housing affordability, health and wellbeing, opportunities for younger people, and the vitality of local communities.

Community-level impacts

• Panel members described visible impacts in their communities. They frequently highlighted the decline of local businesses, including the closure of cafés, pubs and independent shops, and the loss not only of services but also of community hubs and social infrastructure.
• In rural and smaller communities, the closure of such venues was described as having a particularly strong impact, reducing opportunities for social interaction and community cohesion.
• Members also linked rising costs to reduced employment opportunities, lower participation in local activities, and ongoing housing pressures. Concerns were also raised about public services, with some members attributing pressures to a combination of rising costs and longer-term funding constraints.

Awareness and use of cost-of-living support

• Most panel members did not appear to be aware of, or to have received, any formal cost-of-living support (for individuals or businesses). Some felt that they were unlikely to be eligible for any support and therefore did not seek it out.
• Instead, panel members were more likely to rely on informal support networks, particularly family members – including for financial help and childcare.

Attitudes towards a ‘social tariff’ providing targeted support with energy costs

• The Scottish Government has proposed to the UK government that it should implement a ‘social tariff’ for energy costs. 1
• Panel members broadly supported the principle of a social tariff that would provide targeted help with energy costs for those in need, particularly in cases of health, vulnerability or unavoidable high energy costs.
• However, this support was mediated by concerns about who would be eligible. In particular, members were concerned about the likelihood that many households would not benefit from this proposal – for example because they might be just above relevant income thresholds, or not in receipt of qualifying benefits.
• As such, many favoured more nuanced eligibility criteria and warned that poorly designed schemes could exacerbate perceptions of unfairness and social division.
• Members also felt that the policy would not address the underlying root causes of high energy costs – for example by tackling issues of energy supply, security or pricing.

Attitudes towards proposals to introduce caps on the price of basic foods

• Panel members broadly viewed food price caps as a well-intentioned but limited policy, the success of which would be highly dependent on design and implementation.
• While members supported the principle of making essentials affordable, they were highly sceptical that the policy would reduce costs in practice, expecting instead that costs would be redistributed across the system onto other goods, producers and taxpayers.
• They expected supermarkets to protect their profits – and some were sceptical of the government’s ability to deliver the proposed intervention.
• As a result, most members anticipated minimal personal impact unless the policy was more substantial, carefully targeted and embedded within wider support.
• Concerns about feasibility, fairness and unintended consequences broadly outweighed perceived gains, with many members favouring more targeted or structural interventions instead.

Wider expectations of government response

• Panel members called for bolder and more ambitious responses to the rising cost of living, arguing that the government should focus more on tackling the wider structural drivers and underlying root causes of cost-of-living pressures. There was a common view that targeted support measures alone would not address the underlying causes of financial pressures.
• Key themes included energy affordability and security, taxation and incentives to work, housing affordability and housing quality, employment and skills opportunities, and investment in local infrastructure and services.

What this means for Government

The cumulative impact of financial pressure is eroding confidence and trust

• Panel members described rising costs as a cumulative experience over several years, gradually eroding their financial resilience, limiting their ability to absorb further increases, and generating feelings of resignation and exhaustion.
• The cumulative nature of cost-of-living pressures appeared to be contributing to a growing sense of pessimism about the future, alongside declining confidence that living standards will improve.
• This sustained pressure may risk further weakening trust in institutions and confidence in policy solutions.
• The findings suggest that panel members thought about the government response in the context of a loss of trust. There was the sense that government was not listening or being responsive and did not understand what was happening for people as a result of these financial pressures. For government, loss of trust is therefore an important consideration alongside the financial and other hardship consequences.

Households have made adaptations – but there are limits to resilience

• Panel members described how they had adapted in different ways to try to manage rising costs. While these coping strategies demonstrate flexibility, there was also a sense that people and households are reaching the limits of what they can absorb or change.
• There are also wider implications and potential long-term societal impacts to people delaying major life decisions or investments.

There are potential impacts on businesses and the wider economy

• Panel members described reduced household spending as a result of cost-of-living pressures. Spending cuts included discretionary areas such as socialising, eating out, leisure activities, holidays and major purchases. Sustained reductions in consumer spending could reduce demand for goods and services, with negative implications for businesses, investment and economic growth.
• Members also described a reluctance to make major life decisions such as starting a new business. A reduced willingness to take business risks could lead to fewer business start-ups, with potential longer-term consequences for the wider economy.

There are critical considerations for policy design in relation to who qualifies for support

• Cost-of-living pressures were affecting all of the panel members, not just those on low incomes. Some panel members who did not qualify for targeted support, yet were still struggling with the cost of living, felt overlooked. They voiced concerns about being above the threshold for support, and a perception that this was unfair.
• The findings reinforce the importance of recognising that experiences of financial pressure are not determined by income alone. Members highlighted a range of circumstances that shaped vulnerability, including caring responsibilities, disability, household composition and being just above eligibility thresholds for support.
• The findings suggest that the population experiencing significant cost-of-living pressures extends beyond those traditionally viewed as financially vulnerable and may be broader than the population recognised by existing support mechanisms. Policy makers should consider whether policy design, support arrangements and public communication adequately recognise this wider group of households.

Tensions around funding and delivery of cost-of-living support

• There was recognition that some households need additional support with the cost of living, but some uncertainty about how such support should be funded. Some panel members were sceptical about funding support via increases in taxation, believing that additional costs would fall disproportionately on certain groups or could create unintended economic consequences.
• Panel members were sceptical about the extent to which businesses such as supermarkets and energy companies would be willing to prioritise consumer interests over profits. This contributed to wider doubts about whether government interventions could be implemented effectively – for instance members were concerned that price caps on certain foods would lead to rises elsewhere.

Demand for long-term solutions alongside immediate relief

• Panel members argued that government should focus more on tackling the wider underlying drivers and root causes of cost-of-living pressures as well as providing short-term support. For example, they talked about housing improvements, changes to energy pricing, using Scotland’s renewable energy resources, food education, and support for local food production.
• Panel members felt that government interventions were not tackling the underlying causes of high prices for energy, food and housing, and expressed some doubt as to what could be done by national governments faced with global drivers of high prices. The discussions suggested that government response measures may be viewed by some members of the public as more credible when positioned alongside wider action on the root causes of affordability challenges.
• A key implication for government is the need to provide clearer evidence of how it is addressing long-term affordability pressures while also taking action to address the root causes of the rising cost of living and its impacts.