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Scottish Budget 2024: what does it mean for your money?
Changes to income tax, winter fuel payment for pensioners and child benefit are among key proposals
Income tax thresholds will rise and pensioners will receive a new winter payment next year under plans outlined in the Scottish Budget.
Finance secretary Shona Robison unveiled her Budget at Holyrood on 4 December, claiming it to be 'filled with hope for Scotland's future'.
The Scottish government's plans won't come into force until they've been approved by the Scottish Parliament and royal assent has been granted.
Here, Which? takes a closer look at the key Budget announcements and how they could affect your money.
Income tax thresholds to increase
Income tax rates in Scotland will stay the same from April 2025, although the basic and intermediate rate thresholds will increase by 3.5%.
This means that more of your money will be taxed at the starter and basic rates from next April.
The table below shows Scotland's proposed income tax rates and the thresholds for 2025-26, compared to 2024-25.
| Tax band (2024-25) | Income threshold (2024-25) | Tax rate (2024-25) | Tax band (2025-26) | Income threshold (2025-26) | Tax rate (2025-26) |
|---|---|---|---|---|---|
| Starter rate | £12,571 – £14,876 | 19% | Starter rate | £12,571 – £15,397 | 19% |
| Basic rate | £14,877 – £26,561 | 20% | Basic rate | £15,398 – £27,491 | 20% |
| Intermediate rate | £26,562 – £43,662 | 21% | Intermediate rate | £27,492 – £43,662 | 21% |
| Higher rate | £43,663 – £75,000 | 42% | Higher rate | £43,663 – £75,000 | 42% |
| Advanced rate | £75,001 – £125,140 | 45% | Advanced rate | £75,001– £125,140 | 45% |
| Top rate | More than £125,140 | 48% | Top rate | More than £125,140 | 48% |
- Find out more: income tax in Scotland
New winter payment for pensioners
The Scottish government has confirmed that all Scottish pensioners will receive a Pension Age Winter Heating Payment in winter 2025.
Those in receipt of qualifying benefits will get £200 or £300, depending on their age, while all other pensioner households will receive £100.
The announcement comes after the UK government limited the Winter Fuel Payment to those who receive Pension Credit or other specific means-tested benefits.
Previously, most people over state pension age were eligible for the payment; the change resulted in about 900,000 fewer people in Scotland receiving a payment this winter.
- Find out more: what is the Winter Fuel Payment?
No cap on council tax rises
There will be no limit set on council tax rises for 2025-26.
This is despite the Chancellor Rachel Reeves' Autumn Budget pledge to give £200m to local authorities across the UK to help them cover the costs of a continued freeze on rates.
This means that Scottish residents could see a rise in their council tax bill from April. However, Robison stated in her speech that there is 'no reason for big increases in council tax next year'.
- Find out more: council tax calculator
Two-child benefit cap scrapped
The two-child benefit cap, which prevents parents from claiming child tax credit or universal credit for more than two children, will be scrapped in Scotland from 2026.
The Scottish government says it will 'develop the systems necessary' to make that possible during the next financial year, but says success will be dependent on the UK government's agreement and cooperation.
Investment in affordable homes
Robison also pledged to invest £786m in affordable homes.
The funding boost will help housing providers in Scotland build or acquire at least 8,000 homes for social rent, mid‑market rent and low‑cost home ownership.
What happens next?
Members of the Scottish Parliament will debate the contents of the draft Budget and vote on whether to pass the bill. If the plans are approved and receive royal assent, they will come into force in April 2025.
However, the Scottish government – led by the Scottish National Party (SNP) – has a minority in parliament and will need the support of opposition MSPs to pass the bill.
If parliament is completely deadlocked after the Budget goes to a final poll, it is possible that an election would have to be called next year.
