February 2023 | Fair Point | abrdn Financial Fairness Trust Newsletter
28 February 2023All change
The unexpected resignation of Nicola Sturgeon has made February an interesting month for those of us who follow politics in Scotland. We’re watching the SNP leadership contest with great interest; whoever wins the top job will undoubtedly be faced with a large inbox. Our latest Financial Fairness Tracker, released earlier this month, analysed the financial situation for households in Scotland and found a greater proportion are in serious financial difficulty than the rest of the UK. Read our CEO, Mubin Haq’s article in The Scotsman for more on the Tracker (or see our Statistic of the month).
February has been a busy month at the Trust too (OK, probably not as busy as it has been for those in Scottish politics right now). This month we released two new episodes of our podcast. We were joined by human geographer Danny Dorling who discussed Levelling Up, and Paul Lewis from BBC Radio 4’s Money Box who told us why how we manage our money at each life stage matters. Subscribe wherever you get your podcasts to receive alerts when new episodes are released. We are also recruiting for a new Communications and Public Affairs Officer, more on that at the end of this email.
Project in focus - Pension taxation
The current system of pensions taxation provides the most benefit to those with the biggest pensions; people with high retirement incomes and people receiving big employer pension contributions. It does relatively little to support people facing low incomes in retirement. Reducing limits on pension saving – the route taken in recent years – is not a good solution: it does nothing to support low earners, adds significant complexity and leaves subsidies that are still weighted towards the better off. A long-term vision for the system is needed.
In a new report, A blueprint for a better tax treatment of pensions, IFS researchers set out proposals to even out tax support for pension saving.
Statistic of the month – 1.2 million
New analysis released this month shows one-in-five households (21%) in Scotland are currently living in serious financial difficulty – equivalent to 1.2 million people. In the rest of the UK, the figure is 17% of households.
The Financial Fairness Tracker, commissioned by the Trust and analysed by a team at the University of Bristol, has been monitoring the personal finances of UK households since the start of the pandemic (sample around 6,000 UK households, 552 in Scotland).
Researchers found working-age households in Scotland feel worse about their finances than those in the rest of the UK. They are more likely to strongly agree that it is a ‘constant struggle’ to meet their bills and main financial commitments (24% vs 20%); to say that thinking about their finances makes them feel anxious (34% vs 30%); and to feel like they have no control over their financial situation (23% vs 16%).
What’s new?
The charity Surviving Economic Abuse have launched a briefing which helps financial service firms understand their new responsibilities set out by the Consumer Duty and respond to customers experiencing economic abuse. ‘How the Consumer Duty can transform responses to economic abuse’ is freely accessible and provides expert advice for firms. Download it here
Gingerbread published a report on the systemic barriers which prevent single parents from working. Download it here
Vacancies
We are recruiting for a new Communications and Public Affairs Officer. If you know anyone who might be interested in joining our team, please direct them to our website.