Exclusive:Half of Scots cut back on spending and leisure activities as cost of living bites
Three in ten Scots said concerns about money had affected their mental health or caused them to lose sleep, according to latest analysis by the David Hume Institute
More than half of Scots have cut back on non-essential spending and leisure activities as analysts warn of a ‘ticking time bomb’ for those under financial strain.
The latest Understanding Scotland Economy Tracker from the David Hume Institute has shown how Scots are changing their spending habits, as well as the impact that the cost of living is having on them.
Four in ten Scots said they have dipped into savings to meet higher costs.
Meanwhile, three in ten said concerns about money have affected their mental health or caused them to lose sleep.
Some 52 per cent have reduced non-essential spending because of concerns about money matters, while 51 per cent said they have cut back on leisure activities.
It comes as just 37 per cent said they were satisfied with their income level and 49 per cent dissatisfied with how well their income covers the cost of living.
Amid the current economic climate, nearly half of those asked reported that the cost of living was the most important issue facing the country, according to the analysis.
Susan Murray, Director at the David Hume Institute said: “This survey continues to show a ticking time bomb for those under financial strain as they struggle to make ends meet. A significant proportion of people are forced into behaviours that will have a detrimental effect on their long term health.
“Any government talking about economic growth needs to remember a tired and stressed workforce is not good for productivity or the labour market.”
The findings showed just how worried Scots are about the economy.
More than two-thirds of Scots - 68 per cent - said the economy is worse than it was a year ago while a similar proportion - 67 per cent - expect economic conditions to worsen over the next 12 months.
Only around a quarter of Scots - 24 per cent - believe things in Scotland are heading in the right direction.
Ms Murray added: “Scots are not simply asking whether the economy is growing. They are asking whether that growth will make their lives better.
“That is the test governments should face. Economic growth is not an end in itself. If economic policy produces impressive statistics while households continue cutting back, spending savings and losing sleep over their finances, then something fundamental is being missed.
“Scotland needs an economy that delivers more than employment. It needs an economy that delivers security, rising living standards and confidence about the future.
“Until that happens, the cost of living crisis will remain more than a political talking point. It will be a drag on Scotland’s economic potential.”
However, the majority of Scots remained broadly positive about aspects of employment.
Nearly three-quarters - some 73 per cent were satisfied that their employment provides enough paid hours, while two-thirds were satisfied with their job security.
While cost of living pressures remain dominant, the survey pointed to a shifting set of public priorities.
Immigration has risen to a record high for the series. One in four Scots identified it as one of the country's most important issues.
The proportion highlighting social care as a key issue increased to 13 per cent, its highest level since the earliest wave of Understanding Scotland in 2021.
The environment and climate change have also risen sharply to 13 per cent, the highest level since late 2023.
Meanwhile, the proportion identifying healthcare and the NHS as one of Scotland's most important issues has fallen seven percentage points since May down to 40 per cent - its lowest level since January 2022.
The Understanding Scotland Economy Tracker surveyed 2,186 adults across Scotland between 2 and 5 August 2026. The survey has been tracking public opinion and behaviour on the Scottish Economy since October 2021.
The findings come after new Prime Minister Andy Burnham announced plans to cut VAT on energy bills in a bid to reduce the cost of living.
The UK Government suggested it would take £45 off yearly energy bills from October.
Despite this, recent forecasts have suggested that household energy prices are set increase again to the highest level for three years heading into winter.
The energy price cap is currently expected to increase by 4% in October compared with the current rate, experts at Cornwall Insight said.
Analysts said the increase is driven by continued uncertainty linked to the Middle East conflict, which has pushed wholesale energy prices higher.
The ongoing heatwaves across Europe have added further pressure by increasing gas demand for power generation to meet air conditioning and cooling demand.
Cornwall Insight said it expected a typical household to be facing an annual bill of £1,729, up from £1,663, based on an Ofgem’s updated definition of a typical consumer, which came into effect from July to reflect falling household energy use.
It said this would be the equivalent of £1,941 per year based on its previous calculations, up from £1,862 currently.
Scott Edgar, Head of Analysis and Insights, The Diffley Partnership said: “The cost of living remains the defining issue for Scots, and the findings suggest financial pressures continue to shape both public priorities and everyday behaviour.
“While economic sentiment has become slightly less negative since May, large majorities still believe economic conditions are worsening and expect further deterioration over the coming year.
“At the same time, we are seeing the public agenda broaden. Alongside concerns about household finances, issues such as immigration, social care and climate change are becoming more prominent, reflecting a public that is responding both to events happening in Scotland and across the UK.”
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