Consumer debt and mental health
This POSTnote examines the relationship between debt and mental health, alongside risk factors and policy considerations for support and interventions.
DOI: https://doi.org/10.58248/PN732
Overview-
Debt is foundational to the economy. Most UK households have debt, which can help people to improve living standards and/or invest for the future. Debt can affect wellbeing if repayments feel unmanageable (problem debt).
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Evidence suggests a two-way relationship between financial and mental wellbeing. Studies estimate that people with mental health issues are three or more times more likely to have problem debt.
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Some people are at greater risk of problem debt and mental ill-health, such as if they have health conditions or suffer a negative life event.
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Over 1.7 million people receive debt advice in the UK each year. Support for people experiencing problem debt and mental ill-health include the government schemes, such as the Mental Health Breathing Space Scheme, and advice from charities and non-profit organisations.
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Consumers might not disclose mental health or money problems until experiencing serious financial difficulties. Barriers to seeking support include lack of awareness of support options, non-disclosure due to stigma, and difficulty accessing support services due to distress and/or finances.
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Stakeholders have proposed future policy considerations, including integrating debt and mental health support, the role of financial technology and addressing wider systemic issues around financial resilience.
POST is grateful to all contributors and reviewers. For further information on this subject, please contact Dr Clare Lally.
Members of the POST Board*
Department for Work and Pensions
HM Treasury
Money and Pensions Service*
Dr Nicole Andelic, University of Aberdeen
Dr Isabelle Bi-Swinglehurst, Work and Equalities Institute, University of Manchester*
Adam Butler, StepChange
Professor George Callaghan, Open University*
Chris Coates, Understanding Society
Professor Sharon Collard, Personal Finance Research Centre, University of Bristol*
Conor D’Arcy, Money and Mental Health Policy Institute*
Professor Paul Downward, Loughborough University*
Jamie Evans, Personal Finance Research Centre, University of Bristol*
Dr Chris Fitch, University of Bristol and Money Advice Trust
Gambling Research Group, Bournemouth University*
Malcolm Hurlston CBE, Foundation for Credit Counselling / Financial Inclusion Centre*
Dr. Özlem Ögtem-Young, Centre on Household Assets and Savings Management (CHASM), University of Birmingham*
Dr Maddy Power, University of York
Dr Rajiv Prabhakar, The Open University*
Dr Thomas Richardson, University of Southampton*
* denotes people and organisations who acted as external reviewers of the briefing.