The Holyrood report warned that a rising energy and food bill will cause a dramatic fall in real incomes. This is creating a crisis in household debt.
According to the Social Justice and Social Security Committee, the cost of living has created severe problems for low-income people in Scotland.
The committee found that debt and money advisors were being “stretched beyond breaking point” due to growing demand.
It demanded that emergency funds be distributed “fairly and promptly”.
Elena Whitham, SNP MSP Carrick, Cumnock and Doon Valley and convener of Social Justice and Social Security Committee said that rising living costs were pushing people deeper into debt.
She said, “Our inquiry exposed the severe problems faced by households with low incomes in Scotland.”
“We heard shocking testimony about how people are being forced into debt, despite having less money due the rising cost-of-living.
“The truth is that people are already in debt and it will get worse.” It is urgent that we take action to protect those on the lowest incomes who are already faced with difficult decisions about how to spend their limited budgets.
The committee offered recommendations to both the UK government and the Scottish government, using lessons from the pandemic as well as the current economic crisis to devise a way of disbursing emergency funds in a fair and timely manner.
It was also recommended to provide more support for those most in greatest need. Financial support was provided to debt advice services and a strategy for managing debt across all Scottish public agencies.
According to the report, there is a rising pressure on money and debt advisers. Many services are reportedly “stretched beyond breaking point”, which leads to long waiting periods for appointments.
According to the committee, many debt advisors were experiencing financial stress due to their own financial concerns.
Ms. Whitham stated that they also found public bodies to have a “quicker, harsher approach to debt collections”, such as council tax.
She thanked all those who shared their “revealing insights”.
MSP said: “We encourage other public agencies to consult in this manner to ensure that they get the wealth experience that people with lived experiences can offer.”
