The link between money and mental health is clear and it’s also circular. Poor mental health can cause issues with money and worries about money can impact upon your mental health.
That circular impact is laid bare in statistics published by the Money and Mental Health Policy Institute. It noted that almost half of people in problem debt have a mental health problem and that 86% of respondents to a survey it conducted among people with mental problems, said their financial situation had made the issue worse. On top of this, nearly a fifth of people with mental health problems have debt that’s causing them a problem and 72% of people in the aforementioned survey said their mental health had made their finances worse.
Being in debt, especially ‘problem debt’, can be a big burden, leaving anxiety about paying bills and avoiding fines, charges or even legal action. Yet while this element of the relationship between money and mental health is probably more widely understood; the numbers above make it important to reflect on the other part of that relationship.
As the Mental Health Foundation notes: ‘A lack of energy can make it harder to keep track of money, and rash or unwise decisions, can result in spending money on things people can’t actually afford. In more serious cases, taking time off work may cause a sudden reduction in a person’s income and being admitted into hospital can also make it harder to keep up to date with bills.’
The pandemic makes life harder
Understanding this relationship is particularly important in the current moment. The COVID-19 pandemic has the potential to make life hard on both the money and mental health parts of this relationship; making the issue ever more acute and widespread.
As YouGov notes, more than half of the population feel the coronavirus has harmed their mental health – with many people feeling anxious on a regular basis. Mental health referrals shot up last year as the pandemic took hold and calls to the charity Mind reached 500 a day in October, twice as many as usual.
At the same time, a combination of job cuts and reduced pay packets have placed a tighter squeeze on many household budgets; with the Citizens Advice Bureau finding that six million adults had fallen behind on at least one household bill by last autumn.
That financial fallout can, as we’ve seen, either prompt anxiety among people who are worried about making ends meet or add further concern onto the plates of people who find the lockdown and public health emergency a big enough strain on their state of mind. This fallout is likely to last for years too, with public finances facing a £280 billion hit this year alone and the length of the economic recovery impossible to predict.
Improving finances can help
Yet, with greater understanding of this circular relationship we can at least see a way to ease some of the issue in the UK in 2021 and beyond.
Sound, money-saving ideas should now be seen as bringing more than just an economic benefit, with the potential to outline well-being benefits from these too and diagnose them as ways to soothe mental health issues.
One study, for example, found that 43% of people felt remortgaging had had a positive impact on their mental health; evidence that getting this burden off your shoulders can be liberating mentally as much as financially.
Clearly, this is easier said than done and much needs to be done to help those in need. But the role of financial advice; be that at banks and building societies or charities and independent bodies, needs to be seen outside of the prism of cold economics.
Bodies such as Mental Health & Money Advice, set up by Mental Health UK and Lloyds Banking Group, can play a key role in this as we collectively try to recover from the strains of the pandemic.
Where to get help
Helping with debt and finances won’t address every cause of mental health issues but it might both prevent some from emerging and others from getting worse. This two-pronged benefit shows the importance of promoting, supporting, and funding the right bodies at this crucial time.
Do you think you need financial support? Here are some useful contacts:
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