One in seven Scots facing income crisis when furlough ends

Scotland is facing a looming income crisis when the furlough scheme ends and expected redundancies begin, with 14 per cent of Scots already struggling to live on their current income according to a new poll.

One in seven people are worried about their incomes.
One in seven people are worried about their incomes.

The warning from Citizens Advice Scotland, comes after the organisation revealed results of a YouGov survey which found that 10 per cent of people are finding it difficult to survive in their current financial state, with a further four per cent finding it “very difficult”.

CAS believes the figures could get steadily worse over the next few months due to the risk of job losses or income drops as a result of the furlough scheme and payment support measures coming to an end.

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As of this month, employers are now required to contribute 10 per cent of furlough costs rising to 20 per cent in August and September before the scheme ends completely at the end of September.

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Commenting on the research, CAS financial health policy manager Sarah Jayne Dunn said: “Even before the pandemic we knew lots of people were struggling to cope financially but Covid has unquestionably exacerbated the problems for a lot of people.

“Policy makers acted quickly at the outset of the pandemic to protect people’s incomes and help with costs, but with many people already struggling to cope, Scotland could be facing a looming income crisis when furlough and other payment support protections wind down and then expire leading to job losses or reduced incomes.

“This will especially be the case if our wider economy is struggling to return to pre-pandemic levels, and employers are faced with making hard decisions on the future of over 300,000 employees in Scotland currently on the furlough scheme. The reality is that more and more people will be struggling to make ends meet every month."

The poll of 1007 people did find that while one in seven people say they are struggling on their income, 41 per cent said they were “coping”, 35 per cent “living comfortably” and eight per cent “living very comfortably on present income”.

Pam Duncan-Glancy, Scottish Labour’s spokesperson on social justice and social security said the pandemic had worsened life for those in poverty before the pandemic hit.

"We are nowhere near meeting the child poverty targets we set ourselves,” she said. “Child poverty is increasing, including among working family households. One million people in Scotland live in poverty. Half of disabled people here are in poverty. People of colour are twice as likely to live in poverty and women are more likely to work in sectors that don’t pay the living wage.

“We need the Scottish Government to go hard and fast on tackling poverty, and it will take action from across government. We urgently need them to put money in people’s pockets now.”

The Scottish Government has pledged to double the Scottish Child Payment to £20 a week, and SNP Westminster Leader Ian Blackford MP has demanded the UK government publish an “urgent impact assessment” of the withdrawal of the Universal Credit uplift and furlough on household incomes and levels of unemployment, poverty and inequality."There is a very real danger that, by withdrawing financial support this autumn, the Tory government will slash family incomes, cause rising unemployment, and send levels of poverty soaring,” he said.

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