One million Scots set to receive disability benefits by 2031
The Scottish Tories warned the benefits bill is ‘spiralling out of control’
More than one million Scots are expected to be in receipt of disability benefits by the end of the next parliamentary term in 2031, contributing to the “significant” financial challenges facing the country.
The Scottish Fiscal Commission (SFC), the official independent economic forecaster, warned structural trends will “really begin to bite” over the next five years.
It called on political parties to be “realistic and open” when making commitments ahead of the Holyrood election in May.
The Scottish Conservatives said the benefits bill has “spiralled out of control, dwarfing all other areas and creating a black hole in the nation’s finances”.
In a new report, the SFC said: “We expect recent trends will continue, and we forecast that the total number of people receiving disability payments in Scotland will exceed one million by 2030-31.”
Spending on devolved social security payments is forecast to increase from £7.4 billion in 2026-27 to £9.2 billion in 2030-31. More than 80 per cent of social security spending will be on disability payments.
The SFC said the next Scottish government “will need to increase its funding, or cut spending to other areas, to maintain its social security commitments”.
It said nearly a quarter of people in Scotland will be over 65 by the end of the next parliament in 2031, while living standards are expected to increase by less than 1 per cent per year.
SFC chair Professor Graeme Roy said: “Political parties must be realistic and open when making new commitments ahead of the May election. Their manifestos should make clear where additional spending pledges imply higher taxes or reductions in other areas of public spending.
“The new Scottish government must explain how it intends to address Scotland’s fiscal pressures, enabling parliament to debate and determine the most effective response to the challenges set out in this report.
“Whatever priorities it chooses, the next Scottish government must ensure that Scotland’s public finances are on a sustainable path.”
Since the 2021 Holyrood election, the SFC said, more people in Scotland have reported having a disability and are receiving disability payments. Within this period, the Scottish government has introduced new disability payments to replace UK benefits.
These include the Child Disability Payment (CDP), which was launched in November 2021, and the Adult Disability Payment (ADP), which replaced the Personal Independence Payment (PIP) in Scotland in August 2022.
The Pension Age Disability Payment (PADP) is the Scottish government’s replacement for Attendance Allowance (AA).
The percentage of working age adults in Scotland reporting a disability rose from 19 per cent in 2020-21 to 28 per cent in 2023-24, the SFC said.
“As more people have qualified for and received disability payments, spending has risen from £2.9 billion in 2021-22 to £4.8 billion in 2024-25,” it said.
The rate of people receiving disability payments has risen across all ages between 2020 and 2025, but has increased more in Scotland than in England and Wales.
Speaking to journalists, Prof Roy said: “There are these structural trends in society, with the ageing population, that will carry fiscal implications, and these will really begin to bite in the next parliament just because of the age profile that we have there.”
He added: “Historically, we have had a higher proportion of people claiming benefits, disability payments, than the rest of the UK, and that is linked to things like health.”
Elsewhere, Prof Roy said there could be “close to a million people” paying higher rates of income tax by the end of the next Scottish Parliament.
This is largely due to the Scottish Government having frozen the threshold at which people start paying the higher rate of income tax at £43,663, meaning workers are dragged into paying the higher charge as wages rise.
Prof Roy said: “You see that in terms of the types of people who are now higher rate taxpayers, whether that be police constables after a few years or teachers with a few years’ experience, they pay more.”
The SFC said tackling climate change will also “impact on the Scottish public finances in the next parliament and beyond”.
Meanwhile, capital funding – which pays for infrastructure projects such as schools, roads and hospitals – is “expected to decline over the next parliament in real terms”.
Scottish Conservative finance spokesman Craig Hoy said the report was “a damning reflection of the SNP’s economic illiteracy, which has led to unsustainable spending, stagnant growth and higher taxes”.
He added: “The benefits bill has spiralled out of control, dwarfing all other areas and creating a black hole in the nation’s finances that is set to cost taxpayers £10 billion a year by the end of the decade.
“At the same time, the anti-growth, anti-business SNP have slashed spending on economic affairs and made Scotland the highest taxed part of the UK.
“It’s unaffordable and unsustainable to have one million Scots on disability benefits alone. Yet, astonishingly, only the Scottish Conservatives are willing to say that welfare spending must be reined in. Every other party, including Reform, are in denial.
“If the SNP return to office, the economic consequences will be catastrophic.”
A Scottish government spokesperson said the report “recognises the pressures the Scottish government faces, especially when we have limited fiscal flexibilities”.
They added: “The Scottish government has delivered a balanced budget every year despite the challenging financial environment.
“The decisions taken to ask higher earners to pay a little bit more – while ensuring most income taxpayers are expected to pay less than in the rest of the UK – support vital public services and cost-of-living measures such as free tuition, free prescriptions and the Scottish child payment to help tackle child poverty.
“The Scottish government focuses resources to support strategic priorities – growing the economy, eradicating child poverty, tackling the climate emergency and providing high-quality and sustainable public services – whilst embedding a strategic approach to tax and reform.”
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