Poverty in Scotland 2025: An Excluded Perspective
The Joseph Rowntree Foundation’s Poverty in Scotland 2025 report is one of the most comprehensive examinations of poverty published in recent years. It brings together national data, long-term trends and lived experience evidence to assess how far Scotland has progressed towards its statutory poverty reduction targets, and how far it still has to go.
The picture it presents is deeply troubling. Poverty remains widespread, child poverty targets are being missed by a significant margin, and deep poverty is becoming more entrenched. For many households, poverty is no longer a short-term setback but a prolonged condition shaped by insecure income, rising living costs and an inadequate social safety net.
Within this already stark landscape sits a group whose experiences are only indirectly visible in the data: the Excluded community. These are people who received little or no financial support during the COVID-19 pandemic, often because their work did not fit the eligibility criteria for emergency schemes. They include self-employed people, freelancers, sole traders, company directors paid through dividends, newly self-employed workers and others whose livelihoods collapsed overnight without state protection.
For the Excluded community, poverty in 2025 is not simply a continuation of pre-existing disadvantage. It is the delayed and enduring consequence of exclusion during a national emergency. This article re-examines Poverty in Scotland 2025 through that lens, showing why members of the Excluded community are more likely to experience deeper, longer-lasting and more complex poverty, and why many remain trapped in financial recovery mode years after the pandemic officially ended.
The Big Picture: Poverty in Scotland in 2025
The report confirms that poverty in Scotland remains stubbornly high. Around one in five people are living in poverty after housing costs, a figure that has barely shifted over the last decade. While Scotland performs slightly better than the UK as a whole on some headline measures, this relative advantage masks the scale and severity of hardship experienced by hundreds of thousands of households.
Progress towards statutory child poverty targets has stalled. Relative, absolute and persistent child poverty are all forecast to miss interim and final targets by wide margins. The report is explicit that, without a significant increase in policy scale and ambition, Scotland will fail to meet its own legal commitments.
Crucially, the report shows that poverty is increasingly characterised by persistence rather than short duration. Many households move into poverty and remain there for years. This finding is central to understanding the Excluded community’s experience. When income collapsed during the pandemic and no replacement support was provided, the starting point for recovery was dramatically worse than for those who received furlough or self-employment grants. The result is poverty that endures long after the immediate crisis has passed.
Poverty Is Deepening, Not Just Persisting
One of the most alarming trends identified in the report is the rise of very deep poverty. Around 9 percent of people in Scotland now live on incomes below 40 percent of the median. Almost half of all people in poverty fall into this category.
Deep poverty represents a qualitative shift in hardship. Households in very deep poverty are not simply cutting back on non-essential spending; they are struggling to meet basic needs reliably. Food insecurity, fuel poverty, digital exclusion and deteriorating physical and mental health become routine rather than exceptional.
Members of the Excluded community are particularly vulnerable to falling into deep poverty because of how their financial shock occurred. Many entered the pandemic with sustainable livelihoods and modest financial buffers. When income stopped abruptly and support was unavailable, savings were quickly exhausted and borrowing became a means of survival rather than choice.
Unlike households whose incomes fell but were partially protected by state schemes, excluded households often experienced a complete loss of income. This pushed many directly into deep poverty, bypassing the gradual descent that policy frameworks are better equipped to address. Once in deep poverty, recovery requires not only renewed income but debt resolution, stability and time.
In-Work Poverty and the Illusion of Economic Recovery
A central theme of Poverty in Scotland 2025 is the rise of in-work poverty. Six in ten people in poverty in Scotland live in households where someone is working. Employment alone is no longer a reliable route out of hardship.
This finding is especially significant for the Excluded community. Many excluded individuals returned to work after the pandemic in weakened positions. Client bases had shrunk, markets had shifted and operating costs had risen sharply. Work was available, but earnings were lower, more volatile and less secure.
For self-employed members of the Excluded community, recovery often meant working longer hours for less income while simultaneously servicing debt accumulated during the pandemic. The report’s analysis of low pay, insecure work and income volatility closely mirrors this reality.
The narrative of economic recovery frequently assumes a return to pre-pandemic norms. The report challenges this assumption by showing that many workers are now structurally worse off. For excluded households, recovery has meant managing decline rather than rebuilding resilience, locking them into in-work poverty with little prospect of escape.
Debt as a Structural Driver of Poverty
The report discusses debt primarily as a consequence of poverty, but the Excluded community’s experience demonstrates how debt can also become a primary driver of long-term hardship. Pandemic exclusion forced many to borrow simply to survive.
This debt was often taken on under unfavourable conditions, including high interest rates, short repayment periods and limited flexibility. Credit cards, overdrafts, personal loans and informal borrowing became lifelines during the crisis.
Servicing this debt now absorbs a significant share of household income, reducing the impact of wage increases, tax changes or benefit improvements. Even where income has partially recovered, disposable income remains constrained.
The report highlights the impact of benefit deductions, particularly from Universal Credit. For excluded individuals who were eventually forced onto the benefit system, these deductions can feel like a delayed punishment for having been excluded from support in the first place. Money is clawed back from already inadequate payments, reinforcing rather than alleviating poverty.
Child Poverty and Intergenerational Harm
Child poverty remains one of the most urgent issues identified in the report. Around 24 percent of children in Scotland live in poverty, and statutory targets are being missed by a wide margin. Without transformative change, current policies will not deliver the required reductions.
Children growing up in poverty face increased risks across health, education and wellbeing. These effects are cumulative and can shape life chances long into adulthood.
Many families within the Excluded community include children whose formative years coincided with pandemic disruption and financial exclusion. Parental stress, debt anxiety and prolonged insecurity shape the household environment in ways that are not easily undone.
The Scottish Child Payment is rightly identified as one of the most effective anti-poverty interventions currently in place. It has prevented child poverty from rising further. However, for excluded families burdened by debt and income instability, the payment often mitigates harm rather than enabling progress. It helps families cope but does not allow them to move forward.
Priority Families and Invisible Exclusion
The report places significant emphasis on six priority family groups identified by the Scottish Government. Nearly nine in ten children in poverty belong to at least one of these groups, and most belong to two or more.
Exclusion is not listed as a priority category, but it cuts across them. Disabled self-employed people, minority ethnic entrepreneurs, lone parents running micro-businesses and families with young children were all disproportionately excluded from pandemic support schemes.
This invisibility has consequences. Policy responses are shaped by categories, and what is not named is often not addressed. Excluded households appear in the data as poor, indebted or insecure, but the cause of that condition is obscured. Without recognition, there is a real risk that excluded households will be left behind again as policy focus shifts elsewhere.
Housing Costs, Insecurity and Regional Pressures
Housing costs remain a central driver of poverty in Scotland. The report shows that poverty rates are significantly higher when measured after housing costs, particularly for renters. One in ten people are pulled into poverty primarily because of housing expenses.
For members of the Excluded community, housing insecurity was often an immediate consequence of income collapse. Mortgage holidays and rent deferrals provided temporary relief but extended financial strain. Arrears accumulated, and the pressure to catch up continues to shape household finances years later.
Regional analysis in the report highlights stark variation in poverty rates across Scotland. While higher rates are concentrated in parts of the central belt, rural and island communities face distinct challenges, including higher living costs, limited employment opportunities and fewer support services. Excluded individuals in these areas often had fewer alternatives when income disappeared, deepening the impact of exclusion.
Mental Health, Trust and Social Damage
The relationship between poverty and mental health is well established, and the report recognises increased levels of stress, anxiety and poor wellbeing among those experiencing financial hardship.
For the Excluded community, the psychological impact of being left unsupported during a national crisis compounds these effects. Many describe feelings of abandonment, anger and shame. Trust in government and public institutions has been significantly eroded.
This loss of trust has long-term consequences. People who feel abandoned are less likely to engage with support systems, less confident that future policies will protect them and more likely to disengage from democratic processes. The report’s concern about rebuilding trust in institutions is particularly relevant in this context.
Policy Progress and Its Limits
The report acknowledges areas of progress, particularly the impact of the Scottish Child Payment and some local initiatives. However, it is clear that the scale of current action is insufficient to meet statutory targets or address deep poverty.
From the perspective of the Excluded community, the report also highlights a fundamental weakness in policy design: the assumption that systems will function effectively during crisis. When they do not, the consequences are profound and long-lasting.
Incremental policy changes cannot easily repair the damage caused by exclusion. Without targeted recognition of what happened during the pandemic, excluded households are expected to recover using the same tools as everyone else, despite starting from a far worse position.
Why the Excluded Community Is Still Falling Behind
The report shows that poverty in Scotland is increasingly shaped by duration, depth and complexity. Members of the Excluded community are disproportionately affected on all three fronts.
They experienced sudden income loss without mitigation. They accumulated debt to survive. They returned to work in weakened positions. They now service debt while facing rising living costs. Each stage compounds the next.
This is why many within the Excluded community report that they are still playing catch-up, years after others began to recover. The report helps explain this dynamic, even where it does not explicitly name it.
Conclusions: What the Excluded Lens Reveals
Viewed through the lens of the Excluded community, Poverty in Scotland 2025 is more than a statistical overview. It is a case study in how policy failure during crisis reshapes the poverty landscape for years to come.
The report demonstrates that poverty is not simply about low income at a single point in time. It is about security, resilience and the ability to absorb shocks. When people are excluded from support at the moment they need it most, the damage is cumulative and enduring.
If Scotland is serious about tackling poverty, it must not only invest in forward-looking policies but also confront the legacy of exclusion. Without doing so, a significant group of households will remain trapped in deep, persistent poverty, not because they failed, but because they were left behind.
Poverty in Scotland in 2025 cannot be fully understood without acknowledging who was excluded during the pandemic and the lasting consequences of that exclusion.
Read Joseph Rowntree Foundation’s Poverty in Scotland 2025 Report
