Taking control: money and mental health

1 August 2016

By Helen Undy, Head of External Affairs, Money and Mental Health Policy Institute

Money worries, like mental health, is a subject that a lot of us still hesitate to talk about, even with close family and friends. This silence is a problem, especially when we know just how much our financial health and mental health impact on each other.

"Worrying about the amount of money coming in vs what is needed to pay money owed…exacerbated my anxiety levels making it impossible…to think rationally or logically about budgeting." Source

A damaging cycle

In 2010, research from the Royal College of Psychiatrists found that half of adults with debts have a mental health problem, and that one in four people with a mental health problem are also in debt.  

The relationship is cyclical – just as financial difficulties can take their toll on our mental health, mental health problems can also make it harder for us to manage our money, making those financial difficulties more likely, which in turn can make our mental health worse.

For many years, mental health charities, including the Mental Health Foundation, have worked hard to improve the support available for people with mental health problems who are managing financial difficulty.

But, as many of the people we spoke to have told us, there’s still a huge amount we need to do together to prevent people and their families getting caught up in this damaging cycle in the first place.

"I felt I had to make excuses for not attending family social occasions and meals out because of embarrassment over having no money. This leads to further isolation and a sense of worthiness." Source

Money and Mental Health Policy Institute

Martin Lewis, the Money Saving Expert, set up the Money and Mental Health Policy Institute specifically to tackle this toxic relationship between financial difficulties and mental health problems. 

Our recent Money On Your Mind study – based on the experiences of nearly 5,500 people who have lived with mental health problems – sets out in more detail how and why mental health problems can make it harder to manage your finances and living in financial stress can harm your mental health. 

"86% of respondents said their financial situation had made their mental health problems worse."

"72% of respondents said their mental health problems had made their financial situation worse."

Tell us your story

We’re making good progress. But to fix this, we need your help too. There are two main ways in which you can make a difference.

Firstly, if you’ve experienced mental health problems and financial difficulties yourself, or are caring for someone who is, you can join our research panel.

Our Panel of Experts by Experience is the engine behind everything we do. By sharing your story and ideas, you’ll be driving our future work and supporting others who may be struggling, as well as taking part in new research like the consultation mentioned below. In turn, we’ll make sure your voice is heard by government, banks, retailers, regulators, the NHS and beyond.

Find out more and join the panel.

Have your say

Secondly, if you’re a policy expert, professional or someone working in the retail, finance or health care sectors, we want to hear from you as part of In Control, our consultation on regulating spending in periods of poor mental health.

93% of those with mental health problems, who responded to our survey, told us that they spend more when they are unwell. This includes taking out loans or credit cards they don’t want or need or buying goods and services they can’t afford. 

"When the impulse to spend money you can’t really afford is a symptom of an illness you live with, then your mental health directly makes any financial difficulties you may already have immediately worse."

This kind of ‘crisis spending’ is a real problem; more than half of our sample said they had fallen behind with paying their bills this year and many told us about the guilt and anxiety their spending caused. 

As part of this consultation, we want your opinions and thoughts on our ideas for possible solutions, policies and procedures to help people stay in control when they’re feeling unwell. 

These include preventative tools such as giving all consumers the option to set daily spending limits, opt out of particular forms of credit or require a 'trusted friend' to approve high-cost purchases or applications for credit.

Together, we can empower more people to escape the trap of financial difficulty.