CAS found they spent more on energy, telecommunications and finance than those on higher incomes
Scots on low incomes pay a “poverty premium” for essential goods and services, according to research from Citizens Advice Scotland (CAS).
In a new report, Paying to be Poor, CAS found that poorer Scots spent more on energy, telecommunications and finance than those on higher incomes.
The additional costs make their financial situation even worse, which then adversely affects their health and relationships, the charity said.
Low income families were more likely to use expensive prepayment meters to pay for their energy and less likely to switch their supplier to get a cheaper tariff.
If you are poor in Scotland today you pay more for basic services, and so become even poorer. This cannot be right
Poorer Scots were also more likely to use pay as you go to keep their phones topped up, a more expensive option than taking out a contract.
They were also the hardest-hit sector when landline costs rise, and least likely to switch to switch phone company.
Financial services were another point of concern, with low income customers often taking out credit or loans without understanding the full costs involved. CAS also found many on low incomes did not have home contents insurance.
Researchers said in 43% of cases, money worries had led to people cutting back on food while 24% had curbed their energy use.
One in five said their situation had caused stress and anxiety and 13% said it had a negative impact on their personal relationships.
For one in ten people, a low income was said to have had a negative effect on their physical health.
Patrick Hogan, CAS spokesman, said the charity would now bring pressure onto suppliers and regulators in a bid to tackle the problem.
He said: “Many charities have published evidence in recent years which shows that too many people in Scotland struggle on low incomes. Our new research today shows that many individuals’ financial situations are made even worse because poverty levels limit their choices when it comes to accessing consumer services.
“So, if you are poor in Scotland today you pay more for basic services, and so become even poorer. This cannot be right and needs to be addressed.
“We pledge that we will work together with those who supply essential services to persuade them to bring down costs and offer better deals to those on low incomes. We will also raise awareness of cost traps and the importance of making informed consumer choice.
“The market must offer better value for consumers of all income levels. Poverty should not breed even more poverty.”
