Social Security assistance in Scotland: up-rating for inflation - 2025-2026

Foreword

Consideration of the effects of inflation on Scottish social security payments as detailed within section 86A of the Social Security (Scotland) Act 2018.

Laid before the Scottish Parliament by the Scottish Ministers under section 86A(1)(c)

This report sets out analysis of the impact of inflation on Scottish social security payments and confirms the approach the Scottish Government intends to address that impact in 2025-26. Each form of assistance has been adjusted to consider the rate of change in prices in the economy using the recognised measure of inflation – the 12 month rate of the Consumer Prices Index (CPI) – for September 2024.

Since the first Scottish up-rating exercise in 2019, the Scottish Government has frequently chosen to up-rate all payments, including those increased at Ministers’ discretion. This financial support has been absolutely crucial to many people, especially during the current cost of living crisis. This Government believes that the people of Scotland should be able to depend on the social security assistance they receive retaining its purchasing power as prices rise. To that end, through the Social Security (Scotland) Amendment Bill, we have extended the legal obligation to annually increase all benefits delivered under the Social Security (Scotland) Act 2018 in line with inflation.

This extended legal requirement will apply immediately to the Best Start Grants and our winter heating payments. Best Start Foods will be brought under the 2018 Act in future but, until then, the Scottish Government is committed to also increase this payment each year in line with inflation.

This action will help protect the real terms value of these payments, delivering more money for families by way of the Best Start Grants and Best Start Foods. These payments, already more generous than their equivalents in the rest of the UK, support those families most at risk of poverty. Along with the Scottish Child Payment, they are a vital contribution to this Government’s core mission of tackling child poverty.

These annual increases will also apply to our winter heating benefits, helping the most vulnerable in our society to stay warm each year – safe in the knowledge that the value of support provided will be maintained in line with inflation each year.

In an already challenging fiscal environment, it is no surprise that this decision comes with significant financial implications. However, this is a vital investment in the support of families and households in Scotland.

This financial year has also seen the introduction of the Pension Age Disability Payment, a benefit developed and designed by listening to older disabled people. Many continue to find themselves struggling due to the cost of living and it is more important than ever that older disabled people across Scotland receive the financial support they need.

From March 2025, Social Security Scotland will also begin administering the new Scottish Adult Disability Living Allowance. This payment is intended to help disabled people meet the additional costs of living with a disability or health condition. As a closed benefit, it will not be open to new applications and is only for those whose awards are transferred from Disability Living Allowance.

I continue to be extremely proud of our growing Scottish social security system with the principles of dignity, fairness and respect at its core. The actions that the Scottish Government intend to take in this report ensures that the rates of our social security assistance are inflation proofed against rising prices in the economy. This investment will provide much needed support to the most vulnerable in our society and help us in our efforts to address inequality and poverty in Scotland.

Shirley-Anne Somerville

Cabinet Secretary for Social Justice