Mental health and the cost-of-living crisis report: another pandemic in the making?

People living in poverty or experiencing financial stress are more likely to develop mental health problems.

Due to the cost-of-living crisis, poverty and financial stress will likely rise over the next few years. We are seeing increased reports across the UK that more people are going without basic living essentials, such as food and a warm home. Our UK-wide survey has also shown that many people across the UK are feeling anxious, stressed and hopeless due to their current financial situation.

We expect that the effects of the cost-of-living crisis on public mental health will be on a scale similar to the COVID-19 pandemic. Our survey also found that concerns about finances are having a negative effect on people’s ability to engage in some of the activities known to help protect mental health and prevent problems from developing:

  • 30% of adults in the UK have poorer quality sleep
  • 23% meet with friends less often
  • 15% pursued a hobby less often
  • 12% exercised less often

We call on governments across the UK to take action to support people with the same urgency as we dealt with COVID-19.

The most crucial action to support good public mental health will be financial support schemes that prevent people from experiencing poverty and financial stress.

Graph of UK data from cost-of-living report

Our policy briefing paper

In our briefing paper, 'Mental health and the cost-of-living crisis: Another pandemic in the making?', we give an overview of the crisis's current and likely effects on people’s mental health.

We can't ignore the potentially devastating effect the cost-of-living crisis has on mental health.

As well as reviewing the available data and research, we had discussions with groups of people who have been affected, including the MHF Young Leaders, the Diverse Experiences Advisory Panel in Scotland (DEAP) and staff at The Healthy Living Centre Alliance in Northern Ireland. We'd also like to thank the Money and Mental Health Institute and the Poverty Alliance in Scotland for reviewing this paper and sharing their insights.

Mental health and the cost-of-living crisis report (cover)

In our paper, we provide a series of recommendations for governments across the UK, including:

1. Support community social networks, resources and resilience

We recommend fast-track access to additional funding, especially support for grassroots organisations.

Focusing on community assets is important. This means looking at the positives present in the community and the ability of individuals and groups to transform neighbourhoods with the expertise that only people who live and work there have. Funding is an issue; we need to make sure that these valuable community organisations are supported to meet rising costs and can continue to carry out their vital work supporting social connection and good mental health.

2. Assess the mental health impact of all government decisions that address the cost-of-living crisis and implement these assessments

This should be supported by a mental health and well-being policy assessment tool, such as the one currently being developed by the Department of Health in England.

Good mental health and well-being should be at the heart of every government policy. Decision-makers must not only be aware of the mental health impact of policies they implement, but they must also take action to mitigate any risks to public mental health.

3. Leadership: making sure energy companies, other essential service providers and creditors have policies and procedures that underpin a compassionate response to customers experiencing financial strain

Energy, water, telecoms and other utility companies and creditors are in direct contact with customers who may be experiencing distress due to rising prices.

These companies must be urged to promote appropriate and supportive collections activities, provide social tariffs and other options available to customers and review their communications to limit the distress caused by letters, emails and phone calls to people who have fallen behind. Leadership must be shown at the highest levels of essential service companies and creditors and throughout management so that frontline customer service staff (including call-centre staff) are given the power to act with compassion.

4. Making sure that frontline workers know how to respond effectively to the mental health effects of financial stress and strain

This should include frontline workers in health, social care, money and debt advice services, antipoverty and other community organisations, energy companies, water and telecoms services and private financial services companies.

Workers in the frontline public sector and customer service roles must provide a supportive experience for people that does not stigmatise or cause distress. This can be done by building the capacity of frontline workers in various community and service settings to respond to mental distress and signpost support sensitively. This includes call-centre staff, who are often the first point of contact with people in distress.

We will continue our work to influence governments across the UK and push for people and communities to get the support they need to reduce their risk of experiencing poverty, financial strain and related poor mental health.

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