Understanding the changing nature and context of poverty in Scottish rural and island communities since 2010

4. Implications for policy, practice and research

Overview of key findings

This report explored poverty trends in rural and island areas of Scotland since 2010, thereby also examining the nature of poverty experienced in these communities. In addition, the report explored the potential drivers of the rise in relative poverty between 2012 and 2017 observed in certain geographical areas. More recently, economic challenges have occurred due to the impacts of the Coronavirus (COVID-19) pandemic, Brexit (both the lead-up and aftermath), and the war in Ukraine, among other factors, contributing to a cost of living crisis. Analysis revealed that while rural Scotland has generally experienced lower overall relative poverty rates than urban areas, significant disparities in poverty rates have emerged between rural, remote and island communities. Most notably, remote rural areas (including most of the Scottish islands) and remote small towns experienced substantial increases in relative poverty between 2012 and 2017, a trend not observed in accessible rural or urban areas, where rates remained broadly stable during this period. This marked and consistent, although temporary, increase was predominantly seen among working-age individuals in remote areas, while poverty rates for pensioners and children showed only small, gradual increases over time across all geographical areas. Additionally, in-work poverty has increased in all rural areas approaching rates seen elsewhere in Scotland, suggesting that employment alone no longer provides sufficient protection against poverty in rural areas.

Between 2015 and 2023, the proportion of children in relative low income families increased from one in seven to one in five across Scotland, with islands and remote areas following the same upward trend despite lower baseline rates. These areas show a distinct profile, with nearly three-quarters of children in low income families having a working parent, compared to six in ten elsewhere in Scotland. Additionally, among relative low income households in rural, islands and remote areas, lone parent families now represent a majority, marking a significant demographic shift since 2015.

These geographical variations in poverty trends reflect multiple intersecting factors including demographic shifts, employment challenges, housing pressures, and geopolitical developments. Accessible rural areas experienced population and working-age growth with low unemployment, contributing to their broadly stable poverty rates. Conversely, remote areas saw working-age population decline, household composition shifts, and temporary employment drops that coincided with rising poverty. Housing trends reinforced these patterns, with remote areas seeing declining levels of owner-occupation and rising levels of private renting, while all renters in rural areas experienced sharp poverty increases between 2012 and 2017. Across different sources, the lead up to and aftermath of Brexit was identified as contributing to poverty increases during this period, particularly affecting economically vulnerable rural and island communities more reliant on Brexit-sensitive sectors.

Between 2013 and 2019, fuel poverty rates declined in Scotland, particularly in large urban areas and accessible small towns, from one in three households to one in four households in fuel poverty. However, in 2019, four in ten households in remote rural areas were fuel poor and nearly 80% of fuel poor households in these areas experienced extreme fuel poverty. Rural communities face structural disadvantages, including short-term holiday lets that are likely to reduce residential housing stock in areas where housing options are already constrained, and older, less energy-efficient properties with limited mains gas connections, which increase fuel poverty risks.

Despite these challenges, rural areas consistently showed lower levels of food-related disadvantage, with approximately one in ten households experiencing food insecurity compared to one in seven elsewhere in Scotland, and the smallest increases in free school meal registrations between 2018 and 2023.

Implications for policy, practice and research

This analysis of rural and island poverty trends and potential drivers points to several key implications for policy, practice and research.

• Geography and area accessibility are critical factors in poverty resilience, with analysis revealing different poverty trends and experiences across area types that require tailored policy responses. This changing nature of poverty requires an integrated policy approach that considers multiple drivers, including, but not limited to, demographic shifts, employment, housing pressures, energy infrastructure, and access to essential services. There is no one-size-fits-all solution, as intrinsic differences exist not only between accessible, remote, rural and island areas compared to urban areas, but also within these communities. Remote and island households face concentrated challenges including increasing in-work poverty and fuel poverty rates, as well as the emerging challenge of lone parent families becoming the dominant family type among relative low income households. Responses are likely to require cross-sector collaboration to tailor support to the varying experiences and drivers of poverty across different area types. Without focused, place-based action that recognises these geographical and accessibility disparities, poverty in all its forms across demographic groups and household types is unlikely to be effectively tackled, leaving these communities vulnerable to future increases in poverty.
• Remote and island communities face distinctive employment challenges that contribute to higher in-work poverty risks. The increase in poverty between 2012 and 2017 specifically affected working households in remote areas. In addition, evidence shows that most children in relative low income families have working parents – particularly in remote and island areas. Although in-work poverty exists across Scotland, remote and island communities face distinct challenges: low wage levels, job quality, job fragmentation and seasonal employment patterns that are likely to increase the risk of in-work poverty in these areas more than job availability alone. These challenges and the varying poverty trends across different area types need to be carefully considered when developing targeted interventions. Effective strategies might seek to address these interconnected challenges while working within the economic realities that characterise these regional economies in different ways.
• The demographic profile of children in low income households appears to be changing. Among relative low income households in rural and island communities, lone parent families now predominate. This demographic shift represents a fundamental change over time, as lone parent households were previously a minority among relative low income groups in these geographical areas that were dominated by couples. Lone parent families are likely to face particular barriers within rural and island communities related to, for example, flexible and affordable childcare, housing pressures, transport accessibility, and restricted employment opportunities, although evidence is scarce. This trend compounds the existing pattern of higher rates of working parents among relative low income families in these areas. Evidence from the Best Start Bright Futures review reinforces that childcare flexibility and benefit take-up remain key challenges for lone parent families^[97]. We know that lone parent families represent a priority family type at greater risk of poverty^[98]. As such, changes in the profile of household types in rural and island areas could be considered as part of the third Tackling Child Poverty Delivery Plan, potentially complemented by further research into rural and island specific barriers and possible interventions.
• Housing pressures in remote, rural and island areas create distinct challenges that compound poverty risks. Demographic shifts toward smaller household compositions in rural areas create supply mismatches with the existing stock of predominantly larger, older properties, while short-term holiday lets may further intensify pressures by removing stock from the long-term, residential housing market. These housing disadvantages particularly affected renters during the poverty increase, with rises in relative poverty rates that temporarily converged with urban Scotland levels, while homeowners maintained stable rates across all geographical areas. Despite these challenges, rural areas continue to maintain better overall housing affordability ratios than urban areas, though this advantage has diminished over time. It is important to consider these specific supply and tenure vulnerabilities to prevent compounding poverty risks in these geographically distinct communities. Further research disaggregating housing pressures by rural area type and accessibility could strengthen targeted policy development.
• Remote rural areas require bespoke approaches to address the high levels of fuel poverty as a priority, and particularly extreme fuel poverty, that have worsened over time. The Scottish Government’s focus on tackling fuel poverty continues to be important, especially given the likely ongoing pressures on energy prices in combination with structural disadvantages faced by rural and remote households related to available housing stock and existing energy infrastructure. One of the options to consider is the launch of a targeted, tenure neutral program directed at low income households in remote rural postcodes to improve the energy efficiency of existing housing stock. This could prioritise properties using electricity as their primary heating fuel and those with the poorest energy efficiency ratings considering these are drivers of extreme fuel poverty, while including both social and privately rented housing as renters in rural areas experienced particularly evident increases in poverty. However, such a program may need to address local skills shortages in remote rural areas and the Scottish islands concurrently to provide the specialist workforce needed for these energy efficiency upgrades. Simultaneously, options could be explored to enhance competition among alternative fuel providers serving off-grid households, or to boost area-based district heating schemes as sustainable energy solutions for remote communities^[99].
• A review of free school meal eligibility criteria and registration processes couldhelp determine whether they adequately support rural and island families. Free school meal registrations remain consistently lower in rural and island areas despite a higher proportion of children living in relative low income working families. This pattern suggests it may be worth exploring whether current eligibility criteria and registration processes fully capture the financial pressures facing rural and island households. This aligns with broader evidence from Best Start Bright Futures highlighting the need to improve benefit take-up and ensure eligibility criteria reflect families’ economic realities^[100]. There may also be scope for awareness campaigns in rural communities to help ensure eligible families are accessing this essential support.

Strengthening the data infrastructure for rural and island poverty analysis

• Cross-sectional data limitations and small sample sizes continue to hamper rural and island poverty evidence, requiring targeted oversampling strategies. Cross-sectional surveys with declining response rates produce volatile poverty estimates, particularly for remote areas and island communities where sample sizes are often too small for reliable analysis. While geographic boosts could be considered for household surveys like Understanding Society to produce robust information for these communities, it is important to consider the financial cost to deliver this against a backdrop where response rates to household surveys have lowered since the Coronavirus (COVID-19) pandemic as well as operational challenges. Administrative data could be used more strategically to identify and oversample hard-to-reach populations, improving sampling efficiency while reducing fieldwork costs. It is acknowledged that these developments can take several years to put in place. The Department for Work and Pensions’ plans to link administrative benefits data to, for example, the Family Resources Survey ahead of the publication of the poverty statistics in March 2026 should prove beneficial.
• Continued investment in the Scottish Islands Survey remains essential given the distinct challenges facing the island regions alongside those of mainland remote and rural areas. This specialised data collection is crucial for monitoring progress on the indicators outlined in the second iteration of the National Island Plan to be released in 2025, and for tracking the evolving poverty dynamics affecting island communities over time. The Survey’s potential to identify these trends and changes is only beginning to emerge with repeated cross-sectional data collection. Consideration could also be given to enhancing existing data collection mechanisms to better capture the specific challenges facing remote areas, ensuring comprehensive understanding of poverty across all geographic contexts.
• Comprehensive data linkage capabilities should be embedded within existing and emerging government data strategies to enable longitudinal, multi-dimensional poverty analysis across Scotland, ensuring these approaches can support detailed analysis between and within rural, remote and island communities. Continued efforts could focus on facilitating linkages between administrative datasets with sizeable Scottish samples like the Family Resources Survey and longitudinal survey data such as Understanding Society and Growing Up in Scotland. While administrative data provides valuable opportunities for linkage, survey data remains critical for capturing subjective experiences and contextual information not available in administrative records and will require continued investment alongside administrative approaches. Given the interconnected and dynamic poverty challenges facing rural, remote and island communities, linkages should include electronic healthcare records, education and skills data, employment and earnings, housing and accommodation data, and transport and connectivity data to capture the full complexity of rural disadvantage. This approach would enable longitudinal analysis of how multiple factors – from fuel poverty and employment quality to demographic shifts, service access and educational attainment – interact to create poverty challenges in these geographical areas and contribute to poverty trends over time.
• A two-pronged approach could combine immediate data improvements with long-term capability building. Short-to-medium term dataset enhancements can provide more rapid rural evidence while parallel development of comprehensive data linkage infrastructure takes place. Valuable datasets such as Growing Up in Scotland and Understanding Society remain underexplored for poverty research, possibly due to limited expertise within Scottish Government to access and analyse these complex data sources effectively. Local authority-level datasets represent another underutilised resource, requiring improved data sharing protocols and analytical support to unlock their potential. An initial data mapping exercise focusing on commercial datasets that could enhance poverty understanding, such as financial services data, might also be useful as part of this longer-term approach. This strategy needs to be underpinned by pathways to build internal Scottish Government capacity for data linkage and sophisticated multi-dimensional poverty analysis.
• Income-based poverty measures have recognised limitations, requiring monitoring of emerging developments like the Below Average Resources measure to enhance rural and island poverty analysis. The Below Average Resources (BAR) measure being developed by the DWP (UK Government) offers a broader view of household finances by considering savings and unavoidable costs such as childcare, debt and disability expenses that traditional measures miss^[101]. The BAR could provide valuable complementary insights alongside existing indicators for understanding complex financial pressures in rural and island communities. However, adequate sample sizes must be ensured to produce reliable Scottish and geographical data. Furthermore, the BAR does not consider fuel or transport costs. Greater integration of administrative data sources, building on the Office for National Statistics’ work with the DWP and His Majesty’s Revenue and Customs (HMRC) on income statistics, could enhance income data availability both for ongoing poverty analysis and as part of the National Records of Scotland’s broader administrative data ambitions for the 2031 Census^[102]. Close monitoring and early engagement with these developments will maximize their potential contribution to understanding poverty in these communities.