Almost three-quarters of Edinburgh residents (73.5%) have had to use their savings over the past 12 months to cover everyday outgoings as they contend with the cost-of-living crisis.
New data from Scottish Building Society’s Savings Barometer 2026 reveals that 74.7% of people in Edinburgh believe the economic climate has negatively affected their finances over the past year.
Launched in 2025, Scottish Building Society’s Savings Barometer tracks savings habits across Scotland. This year’s findings come as rising prices continue to put pressure on household finances, with annual inflation reaching 3.1%.
For many Edinburgh residents, economic pressures have forced a change of plan with their finances, with more than seven in ten stating they had scaled their financial goal back, extended the time to reach it, or put it on hold altogether.
Nearly three-quarters (73.5%) of those in Edinburgh said they were concerned about their ability to save at all throughout 2026.
Of those able to save, a holiday was the most common savings goal, cited by 33.3% of respondents, compared with 17.5% saving for a new car and 17.1% for a new home.
Their responses mirror the national outlook. Nearly three in four Scots saw their finances negatively affected by the current economic climate, and 65.5% had used their savings to pay for day-to-day outgoings.
Across the different generations, 71.7% of millennials, 67.8% of Gen Z, 64.0% of Gen X and 60.7% of baby boomers said they have had to dip into their savings in the past year.
Paul Denton, CEO at Scottish Building Society, said:“This research is a stark reminder of the pressure Edinburgh households are under. When almost three-quarters have had to draw on their savings over the past year to cover everyday costs, it is clear that, for many, the priority is getting through the month rather than saving for longer-term plans.
“What’s clear from the research is that people want to save, but we know that finding money to put aside can be difficult when household budgets are stretched.
“We want to help people make whatever they can save work as hard as possible for them, whether they are rebuilding a buffer after dipping into it or saving towards a particular goal. There is no one-size-fits-all approach, and even a small amount set aside when circumstances allow can help people feel more prepared for what lies ahead.”
Scottish Building Society is the only building society headquartered in Scotland. Established in Edinburgh in 1848 as the Edinburgh Property Investment Company, it is the oldest remaining building society in the world.
As a member-owned mutual, it offers savings accounts and mortgages, reinvesting surplus profit for the benefit of those members.
The past five years of a near-continuous cost of living crisis have caused the real incomes of typical working-age households to fall rather than grow, leaving them £2,900 (7.9 per cent) worse off this year compared to a world of normal inflation, according to new analysis published today (Thursday) by the Resolution Foundation.
The report Counting the cost, funded by the Nuffield Foundation, assesses the toll of three crises (the post-pandemic supply shock, the invasion of Ukraine, and conflict in the Middle East) that have already delivered 13 years’ worth of ‘normal’ inflation in five, with inflation peaking at 11.1 per cent and prices nearly 30 per cent higher in August 2026 than July 2021.
The report details how energy has been at the epicentre of this price shock. By the autumn of 2022, household energy bills had more than doubled since the start of the crisis. Higher energy costs then bled into other prices: food inflation peaked at nearly 20 per cent in March 2023, and services inflation reached 7.4 per cent in July 2023, its highest level in more than three decades.
Household energy bills and food together account for a quarter of the change in the price level over this period.
The pain felt from these price rises has not been shared equally. Inflation was steepest for essentials, which make up a larger share of poorer households’ spending. As a result, the rise in non-housing costs since before the pandemic has been around one-sixth bigger for the poorest tenth of households than for the richest tenth.
Overall, the report finds the real incomes of a typical working-age household this year (2026-27) are £2,900 a year lower than they would have been compared to a world in which inflation had stayed at 2 per cent over the past five years.
The hit has been similar in scale for households across the distribution. Despite tens of billions in government support, the scars from the cost of living crisis are no smaller for low-income families, and much harder to bear.
The analysis also confirms that between 2020-21 and 2026-27, real median income after housing costs for non-pensioners looks set to fall by 1.3 per cent (£450). Incomes at the 25th percentile are set to fall by 1.2 per cent (£270), while better off households at the 75th percentile will see marginal income growth of 0.3 per cent (£130).
Families have responded to higher prices by heating their homes less – with an extra 1.7 million households saying they were unable to keep warm enough in 2022-23 compared to 2021-22 , 950,000 of whom were in the poorest 40 per cent of the population.
The poorest tenth of neighbourhoods cut energy use by 15 per cent more than the richest in response to price rises in 2023. There were also larger cuts in usage in colder areas, meaning the biggest adjustments happened in the places where those most vulnerable to a gas price shock are more likely to live.
Arrears are also mounting as families fall behind on priority bills, such as energy, water, Council Tax and rent. By March this year, almost one-in-five (18 per cent) households in the poorest half of the country were behind on a priority bill, up from one-in-ten (10 per cent) in September 2020.
The total owed to energy suppliers has more than tripled in real terms since 2018, to £5 billion, while Council Tax arrears in England have more than doubled since 2012-13 (up 117 per cent to £7.5 billion in 2026-26).
As the Government considers fresh cost of living support in the upcoming Budget, the authors warn that recent help was expensive and poorly targeted. The Energy Price Guarantee alone cost over £20 billion and was paid regardless of need. The country cannot afford to repeat that approach.
Instead, any new support should be targeted at the poorer families who have fared worst over the past five years – heating their homes less, taking on more debt, and falling behind on their bills more often – with energy bills the clear priority.
James Smith, Chief Economist at the Resolution Foundation, said:“Having experienced 13 years’ worth of inflation over the past five, families across the country are struggling with the cost of living. Unfortunately, help is needed just when the public finances leave less room than ever to provide it.
“While the hit to incomes from rising prices has been felt right across the board, the hardship has not been equally shared. It is poorer families who have cut back hardest on heating and are falling behind fastest on essential bills, and conflict in the Middle East is set to keep energy prices high.
“The Government can’t borrow its way out of this, and repeating the expensive blanket support of 2022 isn’t an option. Any new help must be squarely targeted at the poorer families facing the greatest hardship – starting with their energy bills.”
Alex Beer, Assistant Director of Strategy at the Nuffield Foundation said:“Five years of unusually high inflation have had a substantial impact on household finances, with lower-income families facing the greatest pressure.
“By showing how rising energy and food prices have reduced living standards and made it harder for people to pay essential bills, the report provides timely and valuable evidence on the consequences of an extended costs of living crisis.
“At a time when policymakers face difficult choices and public finances remain constrained, understanding who has been most affected and why is essential to designing effective policy responses.
“This work forms part of a wider programme of research funded by the Nuffield Foundation examining the consequences of the recent conflict involving the US, Iran, Israel and the wider region.”
You might wonder – what’s that got to do with mental health?
Well, a lot, actually.
Money’s harder to manage if you have a mental health problem. And being in debt makes it harder to look after your mental health.
That’s why it can feel really difficult to get out of a debt – mental health cycle.
Thankfully, if this is something you recognise, there are organisations out there ready to help you. Check out these organisations or our website for more help and support.
New research from the Centre for Responsible Credit shows how concerns around credit scores can prevent people in financial difficulty from seeking help and should be viewed as one aspect of financial health, not the entirety.
Stats from the report show that:
Credit score concerns stop hard-up borrowers from seeking help: Industry-promoted fixation on credit scores deters three quarters of borrowers from seeking support, making debt problems harder to resolve.
Credit score messaging pushes people into hardship: A third (32%) of low-to-middle income borrowers; 6.4 million people are going without essentials like food and heating specifically to preserve their credit score.
“Your latest credit score is ready.” It’s a familiar email or app notification from credit score providers such as ClearScore, Credit Karma and Experian.
But it’s part of a marketing culture that could be encouraging low-to-middle income (LMI) borrowers to take on unaffordable credit and prioritise actions that maintain good scores over spending on essentials such as food and heating.
That is why we are now calling on the newly created Credit Information Governance Body and the Financial Conduct Authority to work with the credit scoring industry and consumer agencies to set standards for marketing dashboards. It’s one of five recommendations set out in this latest report, the second phase of our research in this area.
The first phase, published in July 2025, comprised qualitative interviews with thirty LMI borrowers. The interviews indicated there is a group of people who are highly sensitive to their credit scores, checking these on a frequent basis.
The frequent checking of scores seems to be encouraged by the many e-mails and app notifications that borrowers receive from credit score providers. When they respond to these and visit their credit score dashboards, they are often exposed to marketing offers for further credit.
Worryingly many participants felt that the best way to improve their credit scores was by taking out more credit and using it regularly. Many were also prepared to make considerable sacrifices to preserve their scores.
The scale of the problem
The second phase of our research involved a large-scale, representative, survey of more than 3,400 LMI adults in Great Britain; conducted on our behalf by Walnut Unlimited. Three-quarters of survey respondents used some form of credit (credit cards, Buy Now Pay Later, overdrafts or personal loans) with 40% using it to pay for daily expenses such as food and bills.
Most LMI borrowers check their credit scores at least once per month. Just under one fifth (18%) check their scores at least once per week, and an additional 15% do so more than once per month. A further fifth (21%) check their scores monthly.
When they do so, many enter on-line market places where they receive offers of further credit that may not be appropriate. Our survey indicates that over half (55%) of all survey respondents had received suggestions or offers for credit products from their credit score provider. Half of those (49%) felt that the offers they received encouraged them to take on more credit than they could afford, and over a quarter of (28%) reported feeling pressured to accept the offers that were made to them.
Nearly half (43%) of those being prompted to take up offers of credit by their score providers act on the suggestions they receive, but in many cases this results in financial distress within six months.
Around one in five saw their overall level of debt increase, and the same proportion (21%) experienced stress or anxiety. 18% struggled to make the repayments. 18% also cut back their spending on essentials, while 14% had to borrow more to cover the repayments, and around one in ten missed payments or defaulted.
And yet, alarmingly, three-quarters of borrowers said they would not ask for help from their lender. That’s because most people are unsure whether seeking advice or help will harm their credit score.
A disciplinary effect
Our survey also found clear evidence of a disciplinary effect, with one third (32%, equivalent to 6.3 million adults aged over 18) of all LMI borrowers telling us they have “cut back on day-to-day expenses to preserve” their credit scores.
This rises to 45% of borrowers who are using credit specifically to improve their scores, and to 55% of borrowers using credit to pay off other debts.
We also found a statistically significant relationship between the likelihood of cutting back on essentials to preserve scores and the frequency of score checking.
After controlling for age, housing tenure and incomes, over half (52%) of those checking their score more than once per week have cut back on essentials to preserve their score, as have 45% of those checking their score at least at few times per month.
Actions needed
To address the harms our study exposes, we are calling on Financial Conduct Authority, Credit Information Governance Body and credit score providers to ethically re-design, test, and set standards for credit score dashboards and their marketing.
This needs to include a review of dashboard messaging, so that providers don’t promote credit to people already showing signs of financial difficulties. Dashboards should make it clear that maintaining credit scores should not come at the expense of meeting basic needs.
More is also needed to encourage forbearance requests and debt advice seeking by ensuring dashboards proactively identify borrowers in financial difficulties and link these to independent advice and support, and there is a need to limit push notifications and dashboard marketing, to prevent borrowers from focusing on marginal score changes, and only allowing notifications when underlying credit report information has significantly changed.
The cost-of-living crisis has shattered the finances of millions, with more than a quarter of people currently unable to cover their basic expenses. It’s time for credit score providers to take action to make sure their marketing and processes are not compounding the problem.
Responding to research from the Centre for Responsible Credit, Adam Butler, Public Policy Manager at StepChange, said:“Whilst credit scores can help people understand how lenders may see them, the reality is that they are only one element of what lenders look at when assessing creditworthiness.
“Our research shows that people in financial difficulty often delay seeking help because of worries about the impact on their credit scores.
“This deepens the harm of problem debt and can lead people to take out further credit which exacerbates their financial problems. It’s important to note that seeking free debt advice and exploring options will not have an impact on someone’s credit score.
“The Financial Conduct Authority (FCA) has required the credit information industry to set up a new governance body with stronger consumer representation and make reforms to encourage struggling borrowers to seek help early.
“We want the industry to build on these steps and ensure people can seek help when they need it without fear of punitive credit reporting. As our recent polling found that 18 million people have an outstanding unsecured credit balance of some kind, a credit information system that works well for those who are struggling is vital.”
As Scotland faces a sharp drop in temperatures, national children’s charity, Children First, is encouraging families in Edinburgh who are struggling with the cost of living and keeping warm this January to reach out for help.
The charity warns that they are hearing every day from parents and carers that are struggling to make ends meet and provide basic essentials for their children.
Children First’s support line offers practical, emotional and financial help to families across Scotland 365 days a year.
The team saw the number of callers rise by close to 50 percent towards the end of 2025.They can help with benefit checks, budgeting advice, and accessing emergency support to ensure families stay warm and well this winter.
Simon McGowan, Assistant Director at Children First, said: “We want every parent and carer in Scotland to know they are not alone if they are worried about paying bills or keeping their children warm.
“Our friendly support line team is here to listen and provide expert advice to ensure families get the support they need. We understand how hard it can be trying to make ends meet and the pressure families are under.”
In 2024, Children First’s support line helped families secure close to £2.5 million in financial gains and deal with half a million pounds in debts to make them more manageable.
Kinship carer Tony* who is bringing up his two-year old granddaughter Cara* and had been struggling to make ends meet, got help with his finances from Children First’s support line.
He said: “It was only when Children First support line got involved that things started to get better. I feel like a massive weight has been lifted off my shoulders, it’s such a relief.”
The Financial Conduct Authority’s review of certain types of credit builder products found little evidence that they are effective for most consumers.
FCA want consumers to be able to make informed decisions so that they can navigate their financial lives.
That’s why we carried out work to understand how some credit builder products operate and have been working with firms and credit reference agencies (CRAs) to drive improvements in the market.
Here we explain the work we’ve done, and where consumers can access useful information on improving credit profiles, such as via MoneyHelperLink (external)
What we looked at
Credit builder products claim to help you build a record of making payments, which could improve your credit history and score.
Our review focused on specific credit builder products that simply report your regular payments to CRAs with the sole aim of helping you ‘build’ your credit score or history.
These products typically do not involve regulated credit. But because they are closely linked to the wider credit market and tend to be marketed to people who have little or no credit history, we looked at how they affect consumers.
We didn’t look at other products or features often described as credit builders like low-limit credit cards, rent reporting services, or services which simply explain how your credit file works.
Our key findings
Effectiveness: For most consumers, there is little evidence that these credit builder products significantly improve credit scores.
Potential risks: In some cases, firms reporting payments on these products to CRAs can potentially misrepresent a customer’s financial circumstances and help facilitate access to unaffordable credit. For consumers experiencing financial difficulty, these products are even less likely to positively affect credit scores and may reduce the amount of income available for essential living expenses.
Complexity and regulation: The majority of the credit builder products we looked at are unregulated and firms often fail to clearly explain their limitations and risks.
Our work
Based on our feedback, 5 firms have chosen to stop offering this type of credit builder product. Others have changed their products, business models and marketing materials.
We continue to work with firms offering these products as we decide whether we should take further action.
We’ve engaged with CRAs on new data reporting guidance to ensure that only appropriate information is reported that accurately reflects repayment performance.
What to consider as a consumer
There’s little proof that these products will help improve your credit score or make it easier to get affordable credit.
Think carefully about whether these products fit your needs and are worth the cost.
For more information on improving your credit profile, like tips on low-limit credit cards, or for free debt advice if you’re having money problems, visit:
StepChange has welcomed the Financial Conduct Authority’s (FCA) review into credit builder products, and the harm that they can cause to consumers, particularly if they are struggling with debt.
Peter Tutton, Director of Policy, Research and Public Affairs at StepChange, said:“We welcome the FCA’s new review into credit builder products.
People who have a poor credit history or are new to credit may choose to use these products explicitly to build their credit score. Advertising of these types of products can exaggerate the benefits of having a good credit score, and lead consumers to believe it will help them get access to credit or other financial services.
“Our research finds people in financial difficulty delay seeking help because of worries about their credit scores – almost half (45%) of people finding it difficult to keep up with credit repayments were offered more credit. This increases harm and makes debt problems worse.
“The reality is that credit scores are only one element of what lenders look at when assessing credit worthiness. We support the FCA’s wider work as part of the Credit Information Market Study that lenders should report forbearance arrangements more positively which would make people more confident to get better and earlier help with their debts.
“We need to ensure the credit information system is not used to push people further into harmful debt.”
More support for services to help people struggling with energy bill debt
Services that support people struggling with debt on their energy bills have been expanded after receiving almost £1 million of additional funding.
This will help organisations to provide money and debt advice to customers, increase capacity through additional training for staff, and enhance engagement with energy suppliers to facilitate fairer and more sustainable debt solutions for customers.
£944,000 has been allocated equally between Citizens Advice Scotland, StepChange Debt Charity and Advice Direct Scotland.
Housing Secretary Màiri McAllan announced the investment at the beginning of Talk Money Week, an annual campaign from the Money and Pensions Service to increase awareness of personal finance issues.
Ms McAllan said: “In an energy rich country like Scotland, nobody should be struggling to pay their energy bills.
“The UK Government said energy bills were going to come down, but they’ve only gone up and could rise further still.
“That underlines the importance of our investment in services that support those who are struggling the most.
“Advice agencies like Citizens Advice Scotland, Stepchange and Advice Direct Scotland, play a vital role delivering this support and we will continue to work closely with them to ease the burden of the cost of living and help those who need it.”
The funding is part of a £16.9 million package being invested in free income maximisation and debt advice.
Sharon Bell, Head of StepChange Debt Charity Scotland, commented: “Scotland is facing an energy debt crisis and more and more clients are coming to StepChange Debt Charity Scotland with spiralling energy arrears.
“We welcome this additional funding from the Scottish Government which is allowing us to provide vital energy debt advice to more people across Scotland right when it is needed the most.”
For Debt Awareness Week, we’re highlighting how debt affects mental health – and the support that is available to help.
Throughout the cost-of-living-crisis many people have had to turn to lenders and may be struggling to keep up with their repayments. The mental health toll can be really challenging, with increased feelings of anxiety keeping you up at night or making it harder to enjoy your relationships. It can make existing mental health problems like depression worse and all together, feel overwhelming.
The mental health effects of debt can make navigating it an even more isolating and lonely experience. It’s important to remember that you are not alone, and that there is support available to you.
Want to know more? Join us for our Reddit ‘Ask Me Anything’ 26-28 March r/ukpersonalfinance. We’ll be joined by StepChange to answer all your questions on mental health and debt.
GRANTON INFORMATION CENTRE: FEEDBACK SURVEY
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