Millions struggling with mental health and money issues
New research from Money and Mental Health Policy Institute, which analysed national data from the Adult Psychiatric Morbidity Survey, found that people with mental health problems are 3.5x more likely to be in problem debt than others. Nearly half (46%) of all people with debt problems also have a mental health issue, according to the charity’s research.
Certain mental health conditions are particularly associated with financial difficulties. For example, people with Obsessive Compulsive Disorder (OCD) are almost six times more likely to be in problem debt than people without a mental health problem. Common OCD symptoms such as an unreliable memory and difficulty in processing information make it harder to manage money.
Similarly, people with bipolar disorder or depression are around five times more likely to be experiencing serious financial difficulty. Those suffering from bipolar disorder can show traits such as impulsiveness during manic episodes, which can impair their ability to manage their money. Symptoms of depression such as low moods and poor concentration can also affect people’s ability to run their finances.
The charity is calling on the government to use its upcoming Consumer White Paper to ensure people with mental health problems get a fairer deal from essential services like banks, energy or broadband providers – and more protection from aggressive debt collection practices.
A Treasury Select Committee in July last year said debts and overpayments are often pursued “over-zealously and uncompromisingly” by councils, adding that public sector bodies needed to change the way they recoup debts. Some private sector organisations have taken steps to remedy the problem. Lloyds, for example, has launched its ‘Get the inside out’ campaign to get people talking about mental health problems. It has done work with its staff to try and address the impact of mental health difficulties on finances.
Helen Undy, chief executive of Money and Mental Health, said: “When you’re struggling with your mental health it can be much harder to stay in work or manage your spending, while being in debt can cause huge stress and anxiety – so the two issues feed off each other, creating a vicious cycle which can destroy lives. Yet despite how connected these problems are, financial services rarely think about our mental health, and mental health services rarely consider what’s happening with our money.
“The government has an opportunity to use its upcoming Consumer White Paper to introduce minimum standards that people with mental health problems can expect across essential services like energy and banking, to ensure that they get a fair deal. That should include help to avoid problem debt, and better protection from aggressive debt collection practices when it does happen.
“And ensuring that money advice is routinely offered to people using mental health services would increase recovery rates, as well as improving the financial wellbeing of the 1.5 million people currently dealing with this terrifying combination of problems.”