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

2. Insights from the People ’s Panel

2.1 Lived experience of rising costs

Across all groups, panel members consistently described sustained and cumulative increases in the cost of everyday life, with particular emphasis on food, energy, housing and transport.

The dominant narrative was not one of a temporary ‘shock’, but of a longer-term shift in financial reality, where costs had risen repeatedly while incomes, whether wages, pensions or benefits, had not kept pace. As a result, even those who considered themselves financially stable reported significantly reduced disposable income and increasing difficulty managing monthly budgets.

Panel members frequently referred to the visibility of price increases, particularly in food shopping and direct debit bills, contributing to a sense of loss of control over household finances. This visibility appeared to reinforce the perception that costs were rising continuously and unpredictably.

The extent of impact was widely understood to vary by circumstance rather than income alone. Some groups in the Panel who expressed they were experiencing acute pressures included: 10

• Families with children, particularly where childcare costs are high;
• Single-income households;
• Pensioners on fixed incomes;
• Rural households facing higher transport and energy costs.

A recurring theme was the position of those just above eligibility thresholds, who felt excluded from formal support despite experiencing similar financial pressures. This contributed to wider concerns about fairness and perceived gaps in the support system.

At a broader level, some members described changes to life decisions and trajectories, including delaying or reconsidering having children, moving home or starting a business. These shifts were framed as permanent rather than temporary adjustments, reflecting reduced confidence in future financial security.

I considered starting a business but the risk becomes greater because everything costs so much more. It feels like everyone is a few steps from ruin, so people are taking less risks.

I feel like I did everything right – I came from a working class background, went to uni, got a job. I did everything by the book and it’s still a struggle.

2.2 Long-term concerns

While immediate affordability pressures were widely discussed, members’ concerns were strongly oriented towards the longer-term outlook.

A consistent theme across discussions was uncertainty about the future, both in terms of whether costs would stabilise and whether current coping strategies were sustainable. Many panel members expressed a lack of confidence that conditions would improve, with some suggesting that rising costs were becoming normalised as a permanent feature of everyday life.

Key areas of concern included:

• Retirement and long-term financial security, particularly in the context of rising pension ages and limited savings;
• Housing, including mortgage changes, rent increases and barriers to home ownership;
• Economic opportunities, especially for younger people or new graduates trying to enter the job market.

Members also described a sense that households had already undertaken significant adjustments, leaving limited capacity to absorb further increases without affecting quality of life, wellbeing or essential spending. This was particularly evident in discussions of winter energy costs (see 2.7 Energy as a focal pressure), where expectations of higher bills created anxiety about future affordability.

Concerns were not only individual but also societal, with members highlighting:

• The cumulative impact of rising costs on health and wellbeing;
• Increased pressure on vulnerable groups, including people with disabilities or caring responsibilities;
• The risk of widening inequalities.

These concerns reflected a shift from short-term financial management to broader questions about sustainability and resilience, both at household and societal levels.

Not confident it is going to get better, possibly worse… People will work until they drop, that’s what the future holds for most people.

2.3 Behavioural responses

Panel members described a wide range of behavioural responses to rising costs, often involving multiple overlapping adjustments to daily life.

Changes to shopping and consumption were among the most detailed and widely discussed. These included:

• Switching supermarkets or using multiple retailers;
• Prioritising discounted or reduced items;
• Spending more time planning purchases and comparing prices;
• Trading down to lower-cost alternatives or second-hand options.

Some members also mentioned shifting towards cooking more meals at home, reducing waste, and adjusting how often they used appliances or heating (see 2.7 Energy as a focal pressure). These changes were generally framed as practical and necessary adaptations, but often came with increased time, effort and compromise. Members emphasised that managing costs now required active and continuous decision-making.

Reductions in discretionary spending were also common, particularly in relation to socialising and eating out, leisure activities, holidays and large purchases. Members noted that these reductions could have secondary impacts, including effects on relationships, wellbeing and quality of life.

Travel behaviour was another area of adaptation, though with clear constraints. Some members reported reducing journeys, combining trips, walking more or increasing use of public transport. While these changes were often motivated by the need to save money, a few members described other positive benefits such as walking more regularly or planning journeys more efficiently. However, others highlighted structural barriers, such as limited public transport, particularly in rural areas, and work requirements that necessitated car use. As a result, travel costs were often experienced as relatively fixed, with limited scope for adjustment.

Members also described forward planning and use of financial buffers, such as saving in advance for higher winter energy bills or drawing on savings where necessary. However, these strategies were often seen as temporary or precautionary, rather than sustainable long-term solutions.

People pay a lot more attention to what’s on promotion. The reduced section always clears every single night, which it didn’t used to.

When looking ahead, most members did not describe significant new changes, but instead expected to continue or slightly intensify their current coping strategies. Some were already preparing for predictable future pressures, particularly winter energy costs. Others avoided planning too far ahead, reflecting uncertainty about future costs and limited confidence in their ability to adapt further.

Speaking of last winter and the winter before, I absolutely froze through it. I am trying to keep the thermostat down to about 15 and only putting the heating on to heat water for a bath, maybe for an hour or an hour and a half in the evening, and then relying on a small halogen heater.

I live in a much older house. Takes a lot to heat it and keep it warm in the winter. Having to save for my winter costs now and save it ahead of time.

2.4 Impacts on health and wellbeing

Members described a range of impacts on health and wellbeing, with a strong emphasis on cumulative and indirect effects, rather than immediate physical harm.

The most commonly reported impact was mental and emotional strain, including persistent concern about household finances, stress associated with ongoing budgeting and financial trade-offs, and a diminished sense of financial security. For some members, this strain was described as building over time in response to sustained cost pressures. A small number explicitly linked financial pressure to adverse outcomes such as anxiety, disrupted sleep and broader mental fatigue.

Members also highlighted impacts on family life and relationships, particularly where financial constraints limited the ability to participate in activities, meet children’s expectations, or spend time together outside the home. Reduced spending on social and leisure activities was associated with increased isolation and fewer opportunities for connection and relaxation.

A smaller number of members described direct impacts on living conditions, particularly in relation to cold homes and reduced heating use (see 2.7 Energy as a focal pressure). These accounts raised concerns about potential longer-term health consequences, especially during winter.

Members also described changes to diet and lifestyle with mixed implications for wellbeing. Some reported cooking more from scratch or adopting simpler diets as cost-saving measures, which in some cases were seen as having potential health benefits. Others expressed concern that cost pressures may push households towards cheaper, lower-quality food. Combined with reduced access to physical activity and leisure, this was seen as having potential longer-term consequences for diet and overall health.

At the same time, some members reported no direct personal impact to date, although these individuals often expressed concern for others perceived to be more vulnerable.

It’s heartbreaking that you get more isolated because you can’t afford to do this.

The toll it takes on your mental health is quite large. Everyone is constantly talking about money, when is my loan coming in, when am I going to get paid, when can I work for more money. It’s quite stressful to be honest.

2.5 Community-level impacts

Members consistently described visible impacts in their local communities, particularly in relation to economic activity and shared spaces.

The most frequently cited issue was the decline of local businesses, including closures of cafés, pubs and independent shops. These changes were seen as indicators of wider economic pressure and losses 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, including fewer entry-level roles;
• Lower participation in local activities, especially for young people and families;
• Ongoing housing pressures, affecting stability and independence.

Concerns were also raised about public services, including access to healthcare and local authority provision, with some members attributing pressures to a combination of rising costs and longer-term funding constraints.

Overall, many members described a negative shift in community mood, linked to the visible decline of local businesses, rising financial pressures and reduced opportunities to participate in community life. Some characterised this as a growing sense of pessimism or a feeling that local areas had become less vibrant than in the past.

Some panel members did highlight examples of people coming together through volunteering, community groups or shared activities. However, these were generally seen as responses to hardship rather than evidence that communities were thriving.

We live in a village which used to have two pubs but now there’s only one and it can’t sustain itself. It is an anchor of the community, but people don’t go out in the same way, people are cutting back. Hubs for people to gather in and have a community aspect, they don’t have that anymore.

2.6 Low visibility of formal support

Members reported limited awareness and engagement with formal support mechanisms, with many indicating that they had neither accessed support nor felt likely to be eligible.

Where support was mentioned, it was typically identified through informal channels, such as word of mouth or media, and perceived as targeted towards specific groups, rather than widely accessible.

In contrast, informal support networks were described as central to coping strategies. These included financial assistance from family, informal childcare, or shared living arrangements. Members also highlighted the role of community spaces and initiatives, such as local venues providing warmth, food or social connection. However, access to these varied significantly by location and context.

If there are more things on offer, I’m not aware of them. I don’t know how they would get it out there. A social media or tv campaign, or politicians talking about it.

Realistically me and my husband would not be able to work full time without my mum looking after my child two days a week so we only have 3 days of nursery fees.

2.7 Energy as a focal pressure

Energy costs emerged as a central and defining component of cost-of-living pressures.

Many members described sharp increases in energy bills over recent years and expected further rises, particularly over winter. Because energy is a significant and largely unavoidable cost, it was seen as a key driver of overall financial strain. While most members said they were still able to meet their energy needs, this was often with difficulty and careful management, including trade-offs with other essentials and forward planning, such as saving over the summer to cover winter bills. Several members felt that pressures previously associated mainly with more vulnerable groups were now being experienced much more widely across the population.

Members described a range of behavioural responses to rising energy costs, including reducing heating use, lowering thermostats and cutting back on other energy consumption. Many reported adopting coping strategies such as wearing extra layers, using blankets or alternative heating methods.

Housing quality was a recurring concern. Older and poorly-insulated homes were described as much more expensive to heat, contributing to unequal impacts across households. Support schemes for improving energy efficiency were widely seen as difficult to navigate, complex or inaccessible.

Members also expressed strong views about the wider energy system. There was a common perception that energy companies are making large profits while households struggle, alongside frustration with pricing structures, particularly standing charges. Many members expressed confusion about how prices are set, especially given Scotland’s energy resources and the influence of global events.

Overall, members felt that existing support does not always reach the right people and called for stronger government action. This ranged from improving current support schemes to more fundamental changes such as reforming the energy market or greater public ownership of energy companies.

While many supported Scotland’s investment in renewable energy, this was often tempered by frustration that the benefits were not yet being felt by households. Some members prioritised affordability and energy security over longer-term climate goals, expressing support for expanding domestic oil and gas production as a means of providing more immediate relief.

Council tax and energy bill are the biggest bills... I live in a really old stone cottage so it’s always cold. I sit with a fleece hoodie on permanently, blankets in winter. You do what you can, but you also need to put the heating on to avoid damp and condensation. You have to suck up these costs and just work with what you have left.

A few years ago I was paying £800 a year for energy …now it’s nearly £2000. … I think the government should open up oil and gas fields. I know it conflicts with climate change, but that’s something in the future. We need action now.

2.8 Energy costs ‘social tariff’ policy proposal: Discussion

Members were asked to discuss a proposal for a targeted energy bill discount, often described as a social tariff. 11 While the Scottish Government does not decide energy pricing – which is a UK government responsibility – the Scottish Government will use evidence from the Panel to inform discussions with the UK government on how targeted bill support can be designed and implemented to be most effective.

Panel members discussed proposals for automatic discounts on energy bills for households meeting certain criteria, including factors such as income, household circumstances and unavoidable high energy use associated with health needs or rural living. The level of support would vary according to need and would be funded through general taxation rather than through higher energy bills for other consumers.

Members discussed their initial reactions to the proposal, its likely impact on themselves and others, whether it felt fair, and any potential risks or unintended consequences.

Further information about the policy information provided to members and the discussion questions used in the session is available in Annex B.

Conditional support with concerns about eligibility

Members expressed conditional support for the principle of a social tariff, often describing it as a positive idea for those most in need. However, support was strongly dependent on who would qualify, how eligibility would be determined and how the scheme would be funded.

Members worried that many working households experiencing financial pressure would not benefit, especially those who were just above eligibility thresholds or not receiving qualifying benefits. This reflected broader frustrations with perceived gaps in the existing support system.

Support for the policy was strongest when members focused on people with unavoidable high energy needs, such as those with medical conditions, disabilities, older people or some rural households. Support weakened where the policy was perceived as potentially benefiting people seen as able to work but not doing so, reflecting wider concerns about who qualifies for support and whether this is fair.

Yes, it’s fair. I mean, there are some people who have cancers, for example, who really need to keep the house well heated. And they might, well, in most cases, they aren’t able to do that.

But my concern would be, would somebody ... benefit from that when they’ve never worked a day in their life, but us people who do work and maybe struggle would maybe be unsuitable for it…?

Eligibility and effectiveness

Most members did not expect to qualify for the social tariff themselves. This made it difficult for some to engage positively with the policy and reinforced feelings of being overlooked despite experiencing financial pressure.

Members were highly sensitive to how eligibility would be defined. There was strong criticism of ‘all-or-nothing’ approaches and means-testing based solely on benefit receipt or income thresholds. Many highlighted the unfairness of cliff-edge eligibility and the exclusion of households that appear better off on paper but are still struggling with rising costs.

There was broad support for more nuanced eligibility criteria, combining factors such as household composition, income, housing condition and energy usage, and for approaches that avoid sharp cut-offs. While members generally supported targeted assistance, many wanted to see benefits that felt relevant to their own circumstances.

So you either seem to get every single benefit available or you’re working and you contribute towards society so you get absolutely zero and it just doesn’t feel like quite a fair balance.

Most likely there will be the conditions which I couldn’t meet and the government would consider that I’m doing well enough to pay like quite uncomfortable bills in the winter.

Structural drivers and funding models

A consistent critique was that a social tariff would provide short-term relief without addressing the underlying causes of high energy costs. Many members described it as a ‘sticking plaster’, preferring solutions that tackle root causes such as poor housing quality, energy pricing structures and limited household energy efficiency.

Members were often opposed to funding a social tariff through general taxation, which was seen as placing additional pressure on working households. Many expressed a preference for energy companies to contribute, citing their profits and what some described as a moral responsibility to support customers during periods of high costs.

Some members raised concerns about risks and unintended consequences, including the possibility that energy companies would recoup costs elsewhere or that the policy could increase resentment between those who receive support and those who do not. Distrust of delivery was a recurring theme, reflecting wider scepticism about whether complex policies can be implemented fairly and effectively.

There was some support for piloting or trialling the policy, alongside a desire for clear evidence of impact before wider rollout. Members’ views were shaped by their lived experiences of rising costs, inconsistent support and unequal housing conditions, which fed into broader doubts about fairness and delivery.

The energy companies... they’re on a model of making as much money as they can… surely they should have some moral obligation imposed on them to help support their customers.

Any support to help people that need it is good, but I fear you would be plastering over a problem to help people with the cost of energy for, as opposed to like actually getting to the root cause of the problem.

2.9 Food price caps policy proposal: Discussion

Members were asked to discuss a proposal to introduce limits on the price of a defined range of food items, with the aim of helping to keep essential foods affordable and accessible to households across Scotland. The proposal was presented as a potential response to rising food costs within the wider cost-of-living context.

Members discussed their initial reactions to the proposal, what would make it feel helpful for themselves or others, how they would view potential trade-offs or unintended consequences, and whether it would change the way they shop or the food they buy.

Further information about the policy information provided to members and the discussion questions used in the session is available in Annex B.

Conditional support with concerns about effectiveness

Members expressed conditional support for the idea of food price caps, often viewing the proposal as well-intentioned and aligned with the principle of keeping essentials affordable. Some felt it could help families and lower-income households and limit excessive supermarket pricing.

However, others viewed the policy as unlikely to make a meaningful difference, describing it as symbolic or a ‘gimmick’ unless it was substantial and carefully designed. For most members, support depended heavily on which foods would be covered, how the policy would work in practice, who would pay for it and how it would be enforced.

Members frequently compared food price caps with other interventions, often viewing them as less effective than more structural or targeted approaches. Suggested alternatives included income-based support, food vouchers, windfall taxes on supermarket profits, support for local food production, and measures to reduce food waste or improve food education.

I think it’s just a gimmick, frankly. I don’t think it’s going to make much difference to anyone, but I think it’s just a gimmick. It sounds nice for the government to say this is what we’re going to do. And people think that they’re trying to help. In reality, I don’t think it’s going to be that much of a help.

I think the idea is sort of coming from the right place, but yeah, I think the actual impact would be quite limited, unless... they made it very, very cheap, which realistically I don’t think would be possible.

Implementation, funding and unintended consequences

Across groups, members repeatedly returned to questions of implementation and delivery. The lack of detailed information about how the policy would operate led many to focus on potential risks and unintended consequences.

A key concern was the definition of ‘essential’ foods, which members saw as subjective and difficult to standardise given different dietary needs, health requirements and ethical preferences. Enforcement and compliance were also widely questioned.

Many members expected that supermarkets would protect their profits, for example by raising prices on non-capped items, reducing product quality or shifting costs down the supply chain. There was particular concern about impacts on farmers and producers, who were seen as already under pressure and least able to absorb additional costs.

There was no clear consensus on funding. While many felt supermarkets should bear the cost, others doubted this could be enforced and worried about knock-on effects for workers, producers and consumers. Overall, scepticism about delivery and system-wide impacts strongly shaped attitudes towards the policy.

If the companies aren’t making the money, they’ll just start paying people off. So then we’re putting even more people back onto the breadline. I don’t know. I’m just thinking of it as a whole.

Is it something that would be imposed on supermarkets and they would have to find the losses somewhere? If that’s true they will look to make back that money on other items that are maybe not everyday items, but are going to be bought anyway.

It concerns me in one angle... If you were to put a limit on how much the supermarkets could charge for that, I would be afraid that they would either cut the quality even further to save them money, or that they would knock the reduction in price back to the bakers and the farmers... they won’t absorb it entirely themselves. They’ll pass it back and that could have a dreadful effect.

Expected impacts on households

Many members felt that food price caps would have limited impact on their own household, particularly where expected savings were small, did not apply to the foods they buy, or duplicated existing budget ranges and price-matching.

The policy was seen as potentially more helpful for larger households, families and those on the lowest incomes, with single-person households often expecting minimal benefit.

Some members identified possible positive behavioural or health effects, such as supporting healthier eating or encouraging home cooking. However, these benefits were often seen as contingent on careful design, including nutritional considerations and wider public education.

I think it would have a good impact, because people then can budget… and you could say, right, I’m going to spend this amount this week... And then you could see, maybe… you could pay a wee special meal that week that you’ve got a bit extra money to go and get a wee treat.

Mainstream supermarkets do that anyway... Basic items like bread, milk, potatoes, they’re cheap anyway aren’t they? I’m not sure how much difference it would make.

2.10 Wider expectations of government response

Members frequently moved beyond individual policy proposals and focused instead on the wider drivers of rising living costs. While views differed on the specific solutions, there was a common view that targeted support measures alone would not address the underlying causes of financial pressure. Members often framed these issues in terms of long-term financial security, particularly for younger people facing challenges in accessing housing, building careers and saving for the future.

Taxation and incentives to work

Discussions about taxation were often linked to wider concerns about incentives to work and progress. Members frequently expressed concern about income tax thresholds, withdrawal of support and other perceived ‘cliff edges’ which they felt could discourage people from increasing their earnings, accepting promotions or taking on additional work. Some argued that reducing taxes would leave households with more disposable income and stimulate wider economic activity.

If that situation were ever to come, I would just stop at £43,000 and not go any higher. So I would be blocking my own productivity. I would be reducing my benefit to society. I feel like it needs to be more tiered and more levels, but just more fair between all levels.

Energy affordability and security

Many members argued that reducing energy costs requires action beyond direct support with energy bills. Suggested approaches included increasing domestic energy production, improving energy security and ensuring that households benefit more directly from Scotland’s energy resources. Members often saw energy costs as a driver of wider price increases across the economy.

So if we become a more energy abundant nation… If we get to use that more efficiently... If we had better control over energy and used it better and had more energy freely to use, then it would generally lower the prices because the price of making everything or growing stuff or cooking stuff or cleaning stuff should come down.

Employment, skills and opportunities

Members suggested that improving economic opportunities was as important as direct financial support. Apprenticeships, skills development and clearer routes into employment were often viewed as longer-term solutions that could help younger people achieve greater financial security, improve access to housing and reduce reliance on support.

It could help people in the long run if the government put a lot more funding and emphasis on alternative education routes, particularly apprenticeships. Get younger people in the workforce, on a salary, not the traditional route accruing student loans. The earlier you get in the workforce the better you’ll do financially.

Housing, infrastructure and local services

Housing was repeatedly identified as a major source of financial pressure. Members highlighted the need to increase the supply of affordable housing, improve support for renters and address rising housing costs, which were seen as placing growing pressure on household budgets. The poor energy efficiency of older housing and the challenges to access support with energy efficiency measures was another key theme in relation to housing.

Members highlighted the role that local infrastructure and services play in shaping household costs. Better access to public transport, schools, healthcare and other local services was seen as a way of reducing travel costs and making everyday life more affordable, particularly in rural areas and growing communities.

I’m in social housing and it’s really starting to feel that the price of the rents is just becoming ridiculous and they’re not affordable. Not anymore.

There is no school close by in my area and the transport links are pretty horrendous, if I’m perfectly honest. So if they helped to invest in actually providing a bus service, that might then reduce my need to rely on the car, so reducing my costs of fuel.