The cost of living in Scotland can be high depending on the area and your lifestyle.
Generally, rent tops the list of most expensive bills in the country.
Scotland packs a punch in terms of culture. The scenery is breathtaking and the sense of community is strong, offering a high quality of life, among other things.
If you have made the move or are contemplating it, the cost of living might come as a surprise. You may even wonder, “Is the high cost the price to pay for a premium lifestyle?”
In this article we will give a detailed answer to your question: Why is the cost of living high in Scotland?
Reason for Increasing Cost of Living in Scotland
As global and domestic economic conditions rapidly deteriorated from the outset of 2022, the war in Ukraine dealt a severe blow to the ongoing post-pandemic recovery.
This geopolitical crisis led to an energy supply and inflationary shock that echoed across the country. Thus, pushing it toward a potential recession.
Households and businesses across the spectrum have suffered the effect. However, it is the low-income families that bear the brunt most.
These households are typically those with meager earnings and limited savings. They often face challenges in making ends meet.
Their vulnerability is worsened by the absence of a financial safety net, making them highly susceptible to economic shocks.
Initially perceived as temporary, the inflationary pressures intensified due to the destabilizing effects of the war in Ukraine.
This disruption led to an upward surge in international commodity prices, affecting essential sectors such as food, metals, and, significantly, energy.
However, in recent times, inflation has continued to fall although above the 2% target.
Additionally, some commodity prices have shown signs of easing. But, we cannot say the same for wholesale energy prices, especially gas which has remained persistently high and volatile.
According to the Scottish Fiscal Commission, the average Scottish household is projected to be over 4% worse off by the end of 2023/24, compared with 2021/22
The high cost of living in Scotland can further be attributed to other reasons. For instance, If you live and work in Edinburgh the main issue is housing costs.
Scotland favors the working class. It is also full of wealthy overseas students and tourists. There is an influx of affluent people who buy properties in these working-class areas.
All these contribute to the rising costs of living. So, truly, the cost of living can be high if you are not well-off.
However, as per data from Numbeo.com, the cost of living in the vibrant Scottish capital, Edinburgh, is approximately 18.4% lower than that in London.
In the latter part of 2022, a single person’s regular monthly expenses in Edinburgh, excluding rent, were estimated to be around £700. This estimate does not include non-essential expenses.
Even at that, achieving a comfortable standard of living is possible.
You can still cover expenses and set aside savings in Scotland with a monthly salary of £2,500 which falls below the national average.
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Housing Market Dynamics
A main contributor to the high cost of living in Scotland is the complex dynamics of the housing market.
Demand for housing, particularly in major cities like Edinburgh and Glasgow, often outstrips the available supply.
This results in soaring property prices and rental rates, making accommodation a significant expense for residents.
Moreover, Scotland’s picturesque landscapes and historical architecture make it an attractive destination for property investment. This further drives up real estate prices. As a result, families find themselves grappling with the financial strain of housing costs.
Generally, the cost of living is higher than in other parts of the UK. A nice 1 bedroom apartment in Scotland can cost anywhere from $800 to $1,500 per month. In the same vein, a nice 2-bedroom apartment can cost from $1,200 to $2,000 per month.
A moderately priced restaurant in Scotland typically serves dinner for around $20 per person.
Economic Factors
The economic landscape of Scotland, like any other country, plays a pivotal role in determining the cost of living.
Inflation, currency exchange rates, and wage levels are some factors that can influence your purchasing power.
Scotland’s economic policies and external economic pressures also contribute to fluctuations in prices for goods and services, affecting the overall cost of living.
For instance, statistics regularly show that Scotland has higher average energy bills than those living in England despite being such an energy-rich nation.
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Costs Overview
As we stated in our intro, living expenses in Scotland are subjective and vary based on your preferences, lifestyle, and area. However, this serves as a reasonable baseline.
Although prices have surged, rental costs in Edinburgh, the most expensive city in Scotland, are nearly 48.6% lower than those in London.
Here is a further average estimate of other costs:
Utilities: The average cost for basic utilities in Scotland, including gas and electricity, is around £200 per month. Edinburgh and Glasgow are the most expensive cities in this regard.
Groceries: Despite constituting a relatively small portion of monthly costs, food prices have risen. Expect to spend between £400 and £500 per month on groceries, depending on your food choices and lifestyle.
Transportation: On average, you will spend approximately £100 per month on public transit and petrol. While prices have increased across various sectors, including food, petrol, and utilities, the government has expanded support to households in response to the rising cost of living.
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Conclusion
Did you recently move or contemplate life in Scotland?
While the country offers an enriching living experience, it’s crucial to be aware of the factors that contribute to the high cost of living.
The dynamics of the housing market, energy expenses, and economic factors are some of the reasons for high expenses.
Empower yourself to make informed decisions and manage your finances better.
After navigating these challenges, you will fully appreciate the beauty and charm that Scotland has to offer without being blindsided by unexpected financial burdens.
