How money affects mental wellbeing
Mental health and finances worries are often co-dependent, with money worries being a significant cause for stress and anxiety.
Several studies have shown that a person’s mental wellbeing is significantly worsened by money worries, with a lack of financial education, skills and understanding negatively impacting the mental health of many young people in the UK.
During the past year, people’s stress and anxiety levels have increased amid spiralling living costs against a backdrop of economic uncertainty and mass unemployment.
The Money Advice Trust reported a third of UK adults are financially worse off due to the pandemic, with the impact of this causing 17% of adults to suffer from sleep deprivation.
According to research by financial planning firm Tilney, two fifths (39%) of people in the UK don’t believe they can confide in their partner, spouse or family friend if they feel anxious about money.
The firm found that despite 25% of adults prioritising their mental health last year, only 10% considered their long-term finances as part of these reflections. Only 11% thought about their will and estate planning, while just 9% considered what they wanted their financial legacy to be.
Zoe Bailey, chartered financial planner and director at Tilney, said: “Initiatives like Mind’s Mental Health Awareness Week serve as an important reminder of the mental health issues that can be triggered when we feel overwhelmed. Covid-19 shone a light on the connection between our money and our mental health and while more organisations have increased their focus on financial wellbeing, there is more work to be done to address the financial stress a lot of people have experienced recently and the impact this has had on people’s mental health.”
Research from Close Brothers Asset Management shows that about two in five (39%) of employees have experienced an increase in worries about their financial health, and more than half (51%) of employees experienced an increase in worries about their mental health due to the pandemic.
Female employees (44%) have been significantly more impacted than their male colleagues (34%), while those aged 18 to 34 have felt it hardest, with more than half of them (51%) experiencing greater money worries.
Jeanette Makings, head of financial education at Close Brothers, said: “Understandably, the pandemic has had a direct impact on employee wellbeing and specifically on their mental and financial health. Tackling this, and providing the support needed, even as the majority of employees continue to work remotely, is an area of growing importance for organisations.
“Mental wellbeing has always been impacted by poor financial wellbeing but over the last 12 months this has touched more people and some have been particularly badly affected. Sectors have been hit at all levels and so it has never been so critical to ensure that everyone understands and is confident about the choices they have so they can make the absolute best decisions with the money they have.”