Blog: Scotland's poorest families trapped by the public debt crisis

As cost-of-living pressures continue to bite, Scotland’s poorest families are finding it ever harder to make ends meet.

So many families face financial insecurity that means they struggle to pay bills or to afford everyday essentials.

We can see this daily at Aberlour, where families access our Urgent Assistance Fund for help to cover just the basics, like putting food on the table, heating their homes or clothing their children.

Alongside the day-to-day experiences of the families we support, Aberlour’s own research reveals that public debt – such as council tax, rent arrears and even school meal debt – is pushing children and families into poverty, and trapping them there.

Too often this is the result of aggressive and punitive public debt recovery processes which fail to recognise the adverse impact this can have on families.

Debt recovery action by local authorities can be brutally swift.

A family can move from one missed council tax payment, to a demand for the full amount, to sheriff officers at their door demanding payment, all in the space of a matter of weeks.

For families who rely on Universal Credit, local authorities can choose not to pursue outstanding debt and arrears this way, but to use equally harmful methods.

Instead, they can request direct debt recovery via the Department of Work and Pensions, using deductions that are taken straight from families’ Universal Credit income.

For families there is no right to appeal or representation.

Evidence shows that more than half of low-income families with children in Scotland receiving Universal Credit have at least one such deduction from their monthly incomes.

On average, this amounts to £1000 per year being taken from a family’s already inadequate income to cover these debts. 

Further research published by Aberlour projects that over the next five years, low income households receiving Universal Credit will lose a total of nearly £1billion due to such benefit deductions.

This is at a time when both the Scottish and UK Governments have stated that ending child poverty is a priority.

Both governments are implementing key reforms to social security to help achieve this, including ending the cruel two child limit and increasing the Scottish Child Payment.

However, many families will not feel the full benefit of these changes if any increase in income simply goes straight towards covering debt owed to the state in one form or another.

This is a clear example of the state giving with one hand and taking away with another.

While Universal Credit is a reserved policy area, meaning it remains the responsibility of the UK Government, the money collected via deductions is often used to cover debts owed to Scottish local authorities.

Most often these types of ‘third party’ deductions are for council tax debt recovered on behalf of councils. 

The Scottish Sun’s evidence of the scale of third party deductions from the Universal Credit income of Scottish families is extremely worrying.

It should alert us to the need to urgently change how public debt is recovered in Scotland, so we prevent rather than worsen child poverty.

Enforcing Universal Credit deductions from our lowest income families to recover public debt creates a two-tier system of debt recovery for those who rely on benefits, and fails to take into account families’ already challenging circumstances.

Aberlour’s research also shows that public debt disproportionately affects women, as they are at much greater risk of experiencing problem public debt, in particular female single parents and women living in disabled households.

We can also see the impact of coerced debt, a common form of domestic abuse that exploits women’s economic inequality and can trap them and their children in poverty.

Too often public debt (such as council tax debt) built up by an abusive partner results in the woman being liable for these debts.

Victims of domestic and financial abuse deserve protection, not further punishment, by the very same local authorities who campaign to end violence against women.

The Scottish Government has taken some positive steps in recent years to recognise that public debt is a significant issue faced by low income families.

For example, writing off school meal debt for struggling families who do not qualify for free school meals – thanks to a joint campaign by Aberlour and The Scottish Sun – helped 30,000 children and their families in Scotland.

However, tackling the public debt crisis to prevent families being pushed deeper into poverty means Scotland must begin to do debt recovery differently.

As a country we should both protect those most at risk from problem public debt and also prevent it in the first place.

That is why, ahead of the Scottish Parliament elections, Aberlour is calling on all political parties to prioritise tackling Scotland’s public debt crisis and ending child poverty for good.

Justina Murray

CEO

This article was written for The Scottish Sun and published on 18th March 2026.