Negative mental health effects of rising cost-of-living should spur Government action

3rd Aug 2023
Influencing policies

By Michael Hough, Policy Officer at Mental Health Foundation, and Rachelle Earwaker, Senior Economist at Joseph Rowntree Foundation

As we move into the summer months and parliamentary recess, the ongoing cost-of-living crisis shows no signs of receding. This persistent financial reality is detrimentally impacting the mental health of the nation. 

Over the last few months, at both the Joseph Rowntree Foundation and the Mental Health Foundation, we have been further exploring the impact of this cost-of-living crisis on mental health. 

How financial strain affects mental health 

We know that mental health is shaped by the wide-ranging characteristics of the environments in which we live and that mental health problems are not evenly distributed across the whole population. There are certain risk factors that can make a person more vulnerable to mental ill health. Financial strain is one of these risk factors. It increases the risk of mental health problems and can be a causal factor and consequence of mental ill health. In particular, it heightens the risk of an individual experiencing anxiety or depression. Any focus on reducing financial strain is therefore a focus on improving mental health.

Financial support schemes that can alleviate financial stress for people experiencing poverty are vital. That’s why we’ve been proud to work together, along with our colleagues at the Trussell Trust, on the Essentials Guarantee campaign. This calls for the UK Government to make sure that the basic rate of Universal Credit is at least enough to afford essentials, such as food, household bills and travel costs, and that support can never be pulled below that level.

Our latest findings

Recent polling, commissioned by the Mental Health Foundation for Mental Health Awareness Week, revealed the most common self-reported cause of anxiety for people across the UK was being able to afford to pay bills. 32% of UK adults said being unable to pay their bills had made them feel anxious in the past two weeks.1 Those aged 35-64 years old were found to be most anxious about their finances. In the same poll, 20% of UK adults said debt had made them feel anxious in the last two weeks.2

These worrying trends are also evident in the Joseph Rowntree Foundation’s latest cost of living tracker from May 2023.3 The tracker, which assesses how households in the bottom 40% of incomes are faring during the cost of living crisis, showed that over half of those households (51%) with a member who had a mental health condition reported going without three or more essentials in the last six months.4 This was more than double the rate of those households without a member with a mental health condition (22%). The research also underlined that 82% of low-income households containing a person with a mental health condition reported going without essentials. This is significantly more than the average of 63% for all low-income households.

The tracker shows evidence of links between those in financial strain and going without essentials and poor mental health: 4.1 million low-income households (35%) reported having a person struggling with poor mental health in the last two years. Of this group of households, 40% said their mental health had deteriorated during the last two years, 21% said their mental health had stayed the same, 13% said their mental health had improved, and 26% said their poor mental health had started within the last two years.   

The tracker also shows how the mental health of people on low incomes is being affected by their financial circumstances. Among low-income households who said they were going without at least one essential, nearly half (47%) reported at least one household member experiencing poor mental health in the last two years, compared to 14% of households not going without essentials.

These statistics corroborate what we feared would happen, that the cost of living crisis would put millions of people’s mental health at risk.

Action needed

While the small steps that have been taken such as the introduction of the cost of living grant are welcome, governments across the UK must still do more to help people experiencing problems with their mental health due to the current financial situation. Targeted action is imperative for those high risk-groups that are more likely to be disproportionately affected by the cost of living crisis. Some of these high-risk groups include people on benefits or low incomes, asylum-seekers, refugees, people from Black and minority ethnic communities, lone parents, older people, students and people with disabilities.

Alongside the implementation of the Essentials Guarantee, we are also calling for greater support to be given to community groups through access to additional funding. This means looking at the positive assets present in communities and supporting them through additional funding to carry out their vital work supporting social connection and good mental health. This should be accompanied by the implementation of a mental health and well-being policy assessment tool which would assess the mental health impacts of all government decisions.

We are also calling for leadership to be shown at the highest levels of essential service companies and creditors and throughout management so that frontline workers know how to respond effectively to the mental health effects of financial stress and strain. This could involve building the capacity of frontline workers in various community and service settings and training them to respond to mental distress and signpost support sensitively. Workers in the frontline public sector and customer service roles must provide a supportive experience for people that does not stigmatise or cause distress.

Public mental health, namely the improvement of mental health and wellbeing through preventative work involving communities, organisations and individuals, must be considered a priority in all government policy.

The approach outlined above would mitigate the worst impacts of the financial crisis on the UK’s mental health. Governments across the UK should implement it urgently.

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