The new Money and Mental Health Policy Institute have recently carried out a survey which shines a light on the relationship between mental health and money difficulties and how and why they are linked.

Out of the survey of 5500 people who had lived with mental health problems 86 per cent of respondents said that their financial situation had exacerbated their mental health problem.


Managing money

The survey asked why the respondents had fallen behind with bills over the previous 12 months and the majority of people (67 per cent) cited mental health problems as the primary cause. A large number of people also said they had difficulties with managing money or believe that living on a low income was the reason for falling behind with the bills. Only 36 per cent blamed a job loss or drop in wages or benefits. This indicates that the greater factor in people falling behind with bills is not how much money they have in the first place but how they manage it.


Different financial behaviour during periods of poor mental health

As mentioned in my previous blog a large proportion of respondents reported changes in their spending patterns during periods of poor mental health. Significantly 93 per cent spent more than usual during these periods and 92 per cent found it more difficult to make financial decisions.


Financial problems leading to mental health difficulties

Financial problems can lead directly to mental health distress. Many respondents with financial problems reported anxiety and depression are directly attributed to their poor financial position.

Obviously financial difficulties lead to creditor action. Any creditor action against someone suffering a mental health problem has an increased and exaggerated effect on their mental wellbeing. Creditor letters pressing for payment, demand for payments from creditors all have a greater effect on a person with poor mental health than someone who doesn’t have mental health difficulties.

There can be other effects which are detrimental to being in debt for someone with mental health difficulties. Often financial difficulties will mean that a debtor can go without essentials such as food or heating which is harmful to both physical and mental health. It can lead to the debtor being excluded from activities and support networks which were once a lifeline such as a self-help group, club or society. Financial difficulties can also mean relationships are broken down due to increased stress which in turn creates more pressure on the individual.

It is not just financial problems that can lead to mental health problems, it can happen the other way around too. Mental health problems can lead to financial difficulties.

People with mental health problems will often have a period of manic or impulsive spending or comfort spending to boost low mood, addictive spending is also a common trait. Mental health problems will often lead to a period out of work or reduced income which in turn can trigger financial difficulties and resultant debt.

In addition, many mental health treatments will often lead to difficult side effects, affecting the debtor’s capacity to make financial decisions or manage their finances. This in turn can lead to financial difficulties and creditor action/debt cycle.

The survey has been important in confirming what we already know about the interaction between mental health difficulties and financial and debt problems. There has been much good work done in recent years in financial services and creditors now acknowledge the relevance and importance of their actions with someone who has mental health difficulties.

For more information on the options available to you if you are facing debt, or to access free initial advice from our personal insolvency solicitors, please contact us here.