Tackling child poverty skills package - equality impact assessment

Key Findings

This section summarises the available evidence in relation to poverty and specifically child poverty in Scotland, as well as evidence on the relationship between education and skills development and income from employment, with specific regard to people with protected characteristics. It builds the evidence and stakeholder views included in the EQIA published alongside the delivery plan.

Although the analysis below considers each protected characteristic individually, it is important to note that people may have different protected characteristics which intersect and that cumulative barriers can affect the same person simultaneously.

However, gaps remain in terms of intersectional data on outcomes in Scotland.^[9]

Age

Poverty

Children in priority family groups face a significantly higher risk of both relative and absolute poverty. Although children living in workless households are most at risk, poverty is increasingly affecting working families. Around three-quarters of children living in relative poverty are in households where at least one person is in paid employment.^[10]

The youngest households (household heads aged 16-24) have been consistently more likely to be in relative poverty compared to older households. In 2021-24, 37% of people in households in this group were in relative poverty after housing costs.^[11]

Employment reduces the risk of poverty, however in-work poverty is becoming increasingly common. Relevant drivers include low pay and inability to work enough hours. In 2022-25, 63% of working-age adults in relative poverty after housing costs were living in a household where someone was in paid work.^[12] Furthermore, nearly one in ten people in Scotland are experiencing deep poverty, living on incomes that are less than 40% of the median (the standard poverty threshold is below 60%).^[13]

Income from Employment

Employment in Scotland varies by age group. The employment rate for 16 to 24 year olds has been consistently lower than the employment rate for any other age group since January to December 2007. This is due to higher numbers of people aged 16 to 24 being in education and therefore economically inactive.^[14]

Young people are less likely to be in contractually secure employment and more likely to work in lower-paid sectors such as retail, leisure and entertainment.^[15] The Minimum Wage rate for those aged 21 or younger is much lower than for older workers. Children and young people from lower socioeconomic groups are also less likely to have access to parental networks in terms of employment opportunities.^[16]

In 2024, an estimated 11.4% of employees aged 18 and over earned less than the real living wage; the proportion of employees earning less than the Real Living Wage was higher for women (12.7%) compared with men (10.0%) and for young people aged 18-24 years (36.2%) compared with other age groups.^[17]

Education, Skills and Training

Limited evidence was found on the role of skills and training in alleviating poverty and child poverty, including any Scottish specific evidence. However, there is some evidence to suggest that lifelong learning can deliver significant benefits, including higher earnings, positive labour market outcomes, increased self-confidence and increased social capital.^[18]

The amount of training undertaken is a significant factor influencing pay progression. People with low levels of education face a higher and increasing risk of poverty ^[18] and low qualifications are a key driver of low pay and poverty. The effects of childhood poverty can persist into adulthood, with individuals from poorer backgrounds more likely to experience unemployment, low pay and lower-skilled work.^[19]

Older adults are less likely to hold formal qualifications, participate in training, or feel they have opportunities for career progression compared with younger workers.^[20] Furthermore, access to adult learning is unequal, with disadvantaged groups being less likely to engage in training that supports career advancement, potentially reinforcing existing inequalities.^[21]

Recent data suggests a rise in the underutilisation of skills, with more degree-qualified parents working in low or medium-skilled jobs. In 2024, 20.8% of parents with degrees were in low or medium skilled occupations, compared with 14.8% in 2023 and 15.0% in 2022. However, it is too early to determine whether this is a long-term trend.^[22]

While improving skills can increase access to better-paid employment, skills alone do not guarantee progression. Outcomes also depend on the availability of suitable jobs in the labour market, and caring responsibilities can limit the benefits for some groups.^[23]

Disability

Poverty

Families with a disabled person make up a third of all families in Scotland. Around a fifth (18%) of parents are disabled and 52% of children in poverty live in a household with a disabled person.^[24] Poverty rates remain higher for households in which somebody is disabled compared to those where no-one is disabled. In 2021-24, the poverty rate after housing costs for people in households with a disabled person was 23% (550,000 people each year). This compares with 17% (510,000 people) in a household without disabled household members.^[25]

Engagement to inform the third tackling child poverty delivery pla n^[26] also highlighted, among other things, that disabled households face significantly higher poverty rates, and increased costs (transport, heating, specialist equipment); and that families with a disabled member face challenges around limited accessible childcare and wraparound care.

Income from employment

Disabled parents are less likely to be in paid employment compared to non-disabled parents and those who are in employment tend to work fewer hours, particularly disabled mothers. Disabled parents are more likely to be underemployed, in terms of working fewer hours, and also under-utilise their skills.^[27]

The employment rate for disabled people has been consistently lower than the employment rate for non-disabled people. The employment rate for disabled people aged 16 to 64 was estimated at 50.9% in January to December 2025, compared to 83.4% for non-disabled people.^[28] The estimated disability employment rate gap remains large, though it has narrowed from 37.4% in January to December 2016 to 32.5% in January to December 2025.^[29]

Disabled people face a number of barriers to entering, sustaining and progressing in employment due to a range of factors, including health needs and caring responsibilities, lack of affordable childcare, transport, inaccessible job adverts and application processes, workplace discrimination, lack of flexible working and inadequate support. While recognising these barriers mean that employment is not a realistic option for some, many disabled people would like to be in employment.

Disabled people who are employed are also more likely to experience insecure work, discrimination and to work in lower paid occupations with limited opportunities for progression. Supporting Fair Work through actions such as flexible working and training opportunities particularly benefits disabled people and people with long-term health conditions, as well as people with caring responsibilities.^[30]

Education, Skills and Training

Disabled parents are much more likely to have low or no qualifications compared to non-disabled parents.^[31]

Sex

Poverty

Child poverty is closely linked to women’s poverty because women continue to undertake most unpaid caring and household responsibilities, including childcare.^[32] Although relative poverty rates after housing costs were the same for women and men (19%) between 2021 and 2024^[33], this measure is calculated at household level and may mask gendered differences in income and financial security.

Poverty rates have been historically highest for single mothers but have gradually declined to be comparable with other single household types. In 2021-24, poverty rates were highest for single childless men (33%, 90,000); whereas the poverty rate for single childless women and single mothers was 28% and 30% respectively. Estimates for single fathers are not available due to small sample sizes.^[34]

The vast majority of one-parent households are led by women.^[35] Furthermore, other households that are at greater risk of poverty are also more likely to be headed by women. For example, households with a mother aged under 25, families with a baby under one (where women are more likely to reduce working hours or stop/pause paid work completely) or families with three or more children (where caring is mostly the responsibility of women). Therefore, the barriers and personal circumstances of priority groups most at risk of child poverty disproportionately affect women.^[36]

Statistics alone provide a limited view of gendered poverty experiences. Existing data masks how income is distributed across members of the same household, the choices individuals can make in increasing their income, or the diverse challenges people may face.

Income from Employment

Despite improvements in women’s skills and qualifications, significant gender inequalities remain in the labour market. ^[21] Women who are employed continue to earn less than men. In 2025, the gender pay gap for full-time employees in Scotland widened from 2.0% in 2024 to 3.5% in 2025. This is due to men’s hourly earnings (excluding overtime) increasing at a faster rate than women’s hourly earnings (excluding overtime), when considering full-time employees.^[37] Women also make up 72% of those in persistent low pay.^[38]

The estimated employment rate for women in Scotland has been slowly increasing over time, from 67.7% in January to December 2004 to 72.1% in January to December 2025. Nevertheless, the employment rate for men in Scotland has consistently been above the employment rate for women. Although this gap has typically been narrowing over time, it widened from January to December 2022.^[39]

In 2025, 11.3% of employees aged 18 and over in Scotland earned less than the Real Living Wage, a slight improvement from 11.5% in 2024. However, women remained more likely than men to be low paid, with 12.0% of women earning below the Real Living Wage compared with 10.5% of men. This indicates that low pay continues to disproportionately affect women in Scotland despite the overall reduction in the proportion of workers earning below the Real Living Wage.^[40]

Women disproportionately carry out caring responsibilities in both formal and informal sectors and as either paid or unpaid carers.^[41] Caring can have a significant impact on those who provide it, including reducing the time and energy the individual has for paid work and limiting their choice in terms of career and work locations, and can have a significant impact on carers’ wellbeing. Women are also more likely to have career breaks in order to accommodate unpaid caring roles. The economic impact of caring can have an immediate impact on current household income but can also reduce future pension income. Taking a career break can also create additional barriers for carers when attempting to return to paid employment. These inequalities in caring responsibility can drive aspects of the gender pay gap, whilst hiding the true costs and value of care provision. ^[26]

Those in priority family groups, including lone parents, people living with a disability, and carers often receive lower pay. Further, the size of the motherhood pay gap is associated with family size and increases with a growing number of children in a family. While some minority ethnic women experience discrimination due to their gender and race, this is more pronounced for migrant women not born in the UK who often experience a wider pay gap. We know that many families often belong to more than one priority group and women who belong to one or more of these family types or have more than one protected characteristic face multiple intersecting disadvantages in accessing equal pay. ^[26]

Stakeholder consultation for the final delivery plan highlighted key challenges affecting women's labour market participation and earnings, including low pay, the undervaluation of female-dominated occupations, unpaid caring responsibilities, and the need for better transport, childcare provision and flexible employment support. ^[26]

Education, Skills and Training

Women's ability to upskill and reskill is often limited by structural inequalities, including caring responsibilities, single parenthood, and overrepresentation in low-paid, part-time and insecure work. Skills policies are often viewed as insufficiently focused on women's specific needs and lacking alignment with wider employment and fair work policies.^[42]

Key barriers include limited access to affordable and flexible childcare, reduced opportunities for workplace training, and declining availability of flexible working (or training) arrangements. Improving childcare provision and expanding flexible work opportunities are seen as essential to helping women access training, develop skills, and progress in employment. ^[42]

Pregnancy and maternity

Poverty

Households with young children remain among the most vulnerable to entering poverty, with children from families with the youngest child under the age of one having a higher risk of being in relative poverty. For some families having a baby can be a trigger point for falling into, or deeper into, poverty. Child poverty amongst families with babies has risen from around 24% in 2010–13 to 35% in the latest figures. Mothers who stop paid work after having a child and do not return by the time the child is five years old are more likely to be younger and single mothers, making them more susceptible to living in poverty. ^[26]

Income from Employment

Having children leads to a substantial and long-lasting reduction in mothers’ earnings. Recent UK research showed that five years after the birth of a first child, monthly earnings were reduced on average by 42%, or £1,051 per month, compared with earnings one year before the birth.^[43]

Motherhood can have a significant impact on the number of hours that mothers can work, which then affects their pay and income relative to non-mothers and men.

Most new mothers see a reduction in their income from employment – due to reduced income from parental leave or re-adjustment of working patterns. ^[26]

Families with mothers under 25 years old are one of the priority family types, with young mothers less likely to be in paid work. Women and young people are at higher risk of in-work poverty and have a lower average hourly rate of pay.^[44]

Lone parent families have limited options for increasing income from employment. The majority of lone parents are in paid employment already, but still in poverty. Lone parents tend to work fewer hours and have a lower hourly wage, reflecting the gender pay gap and also the greater weight placed on women to undertake unpaid work (including childcare).^[45]

Education, Skills and Training

Lone parents are more likely to have low or no qualifications, and those with degrees more likely to work in low or medium skilled occupations.^[46]

Families with younger mothers (25 or under) are more likely to experience barriers in accessing further education while balancing the responsibilities of motherhood. This is reflected in attainment levels, with only 17% of mothers aged under 20 holding qualifications at Higher Grade or above, compared with 50% of mothers in their early twenties and 80% of mothers aged 25 and over.^[47]

Gender reassignment

Robust data is not available for this group.

Sexual orientation

Poverty

The 2022 census found there were 183,860 LGBTQI+ people in Scotland, which represents 4% of people aged 16 and over.^[48] The poverty rate has been consistently higher for LGBTQI+ adults compared to straight / heterosexual adults. In 2021-24, 28% of LGBTQI+ adults (number not available due to small number in sample) were in poverty, compared to 19% of straight adults (560,000 adults) and 18% of adults where sexual orientation was not known (230,000 adults).^[49] We do not have any data on how the impact of being in poverty or on a low income differs depending on sexual orientation.

Race

Poverty

Minority ethnic families are disproportionately affected by child poverty in Scotland. Although they account for only around 10% of children, they experience the highest poverty rates of any priority group, with 47% of children in these families living in poverty between 2021 and 2024. As a result, they represent around one in five children living in poverty.^[50]

Over the five year period 2019-24, people from non-White minority ethnic groups were more likely to be in relative poverty after housing costs compared to those from the ‘White - British’ and ‘White - Other’ groups. The poverty rate was 43% for the ‘Asian or Asian British’ ethnic groups and 50% for ‘Mixed, Black or Black British and Other’ ethnic groups. The poverty rate amongst the ‘White - Other’ group was 20% and that of the ‘White - British’ group was 18% (840,000 people). Due to the small sample sizes for some of the ethnic groups, and the fact that ethnic composition of the population is not accounted for in the survey weighting process, estimates fluctuate between years and the measurement uncertainty is fairly large. ^[26]

The Scottish Government's consultation on the third tackling child poverty delivery plan found that minority ethnic families face a higher risk of poverty due to barriers such as discrimination, lower benefit uptake, limited access to suitable housing, and digital and language challenges. The consultation also highlighted the significant difficulties experienced by migrants and families with No Recourse to Public Funds (NRPF), who are often excluded from Universal Credit and other benefits, leading to severe financial hardship while facing high child-related costs and limited access to childcare, transport, and employment support. ^[26]

Income from employment

The employment rate for minority ethnic groups has been consistently lower than the employment rate for white groups. The employment rate for minority ethnic groups aged 16 to 64 was estimated at 65.5% in January to December 2025 compared to 75.5% for white groups.^[51] The minority ethnic employment rate gap is the difference between the employment rates for minority ethnic groups and white groups aged 16 to 64. In 2025, the minority ethnic employment gap was estimated at 9.9 percentage points.

While minority ethnic school leavers tend to outperform other pupils, this does not translate into better work outcomes. Minority ethnic workers can experience discrimination in progression opportunities during employment, and women may face additional barriers in accessing and navigating quality employment. They are more likely to work irregular hours, which can lead to challenges around finding suitable childcare, tend to be paid less per hour, and are more likely to be underemployed.^[52]

People from minority ethnic backgrounds are more likely to be underemployed in relation to their level of qualification or over-qualified for their role. This persists even when skills and qualifications are improved. ^[54] This would suggest that, while support for upskilling and progression opportunities provided by the three college projects is expected to have positive impacts, work to address wider labour market inequalities would further enhance the benefits for people in target groups.

Evidence shows that Black and minority ethnic (BME) workers are more than twice as likely as White workers to experience insecure employment, where working hours, pay and job availability are uncertain. This disparity is linked to factors such as employment discrimination and occupational segregation, which result in BME workers being overrepresented in low-paid, temporary and zero-hours roles.^[53]

Workers from several ethnic minority groups, including Indian, Pakistani, Bangladeshi, Black Caribbean and Black African backgrounds, also report having less control over their work compared with White workers. In addition, first-generation migrants often face labour market disadvantages due to language barriers, limited professional networks and the under-recognition of overseas qualifications, while UK-born ethnic minorities generally encounter fewer barriers because of stronger language skills, cultural familiarity and UK-recognised education and qualifications.^[54]

Education, Skills and Training

Joseph Rowntree Foundation’s annual poverty report notes that (anecdotally) the skills and qualifications of minority ethnic people are often undervalued rather than being recognised, supported and built upon.^[55]

Systemic racism is the most prominent barrier to BME people accessing upskilling and training opportunities, Furthermore, too often training needs for BME people focus almost solely on English language provision. This ignores the fact that language is not a skills gap for many BME people, particularly those who were born in Scotland. Childcare remains a key barrier to the uptake of upskilling and reskilling opportunities for women in these groups. ^[56]

Religion or belief

Poverty

In 2019-24, Muslim adults were more likely to be in relative poverty (53%, 50,000 each year) than adults overall (19%), after housing costs were taken into account. Of adults belonging to the Church of Scotland, 15% were in relative poverty after housing costs (150,000 adults each year), compared to 17% of Roman Catholic adults (90,000 adults) and adults of other Christian denominations (20%; 70,000 adults).^[57]

Income from employment

The employment rate of Muslims in Scotland has been consistently lower than that of the wider population. Estimates for other minority religious groups remain statistically limited due to small sample sizes, but previous equalities research suggests that employment outcomes for religious groups in Scotland such as Sikh, Hindu and Buddhist are often less favourable than the overall population.^[58]

Marriage and civil partnership

Poverty

In 2021-24, the relative poverty rate after housing costs was highest for divorced (or separated) adults (28%, 90,000) and single adults (29%, 270,000). Married and cohabiting adults were the least likely to be in poverty (14%, 15% ; 310,000 and 90,000) with widowed being in the middle (21% and 60,000).

Poverty among widowed and divorced/separated adults largely decreased over the long term, whereas the trend for singles, cohabiting and married adults was broadly flat over time. Divorced women are more likely to suffer prolonged financial hardship in the long term than men and in the event of separation or the loss of a partner, women can be especially vulnerable to entering poverty.^[59]