Debts & Loans

As the credit crunch continues to bite, the stress and concerns about job losses, rising debts and the cost of fuel bills can have serious effects on people’s mental health.

I have seen first hand the impact of the financial crisis and the credit crunch. We are already seeing increased demands for our services as people struggle to cope. As jobs disappear it grows harder to keep up with mortgage repayments, bills and other expenses.

Credit has become ever harder to come by.

For people who already have a mental illness, this downturn makes life even harder. For those who didn’t have a predisposing mental health problem, going into serious debt can be the tipping point. A report last month by the Government think tank Foresight showed debt and mental health problems are very closely linked.

We already know that one in six people will suffer from a mental health problem at some point in their lives. The report highlights that one in three people who are seriously mentally ill is in debt. In effect, they are three times more likely to be in debt than people without mental health problems.

Worryingly, the report also says people who are disconnected by their utility company have three to four times the rate of mental illness of the general population. More than 400 experts worked on the report. It makes a strong case for the government to work with financial organisations and utility companies to break the cycle between debt and mental illness.

A range of recommendations is included, beginning with better training for teenagers in managing finance, greater awareness of the link between mental health and debt by banks and financial institutions and new measures by utility companies to handle arrears in more humane ways.

The cost of mental illness is already far greater than most people realise. Between ten and 14 million working days are lost at an annual cost of £750 million to the economy because of people going off sick with mental illness and stress. Only 24% of adults with long-term mental health problems are in paid jobs.

The total cost of mental health illness in health and social services, financial support and lost productivity is estimated at £77 billion a year in England alone. The catalysts for going into debt include major life changes such as relationship breakdown or the death of a partner, low income, the onset of a serious illness including mental illnesses, income disruption such as the loss of a job and pressure from lenders.

In a credit crunch the external pressures increase and are felt most by those least equipped to cope. We have both cause and effect occurring at once. It is vital that the Government, employers and the financial services industry acknowledge the links between debt and mental health problems and ensure people with mental health issues are not treated unfairly, discriminated against or taken advantage of.

It is much cheaper and kinder to help a person maintain their income, home and their heat and power supply than to pick the pieces up afterwards, especially when children are involved. Readers can be assured that mental health service leaders like me are lobbying the Government very hard on this.

People must, of course, also take responsibility themselves to do all they can to look after their finances and support their own mental health. Perhaps the credit crisis will help us all get a sense of proportion about what really matters in life. We all need a roof over our heads and food in our stomachs, but some of the things people have grown to consider essential are not so at all.

It is also vital that people do not ignore problems of growing debt. It doesn’t go away by itself. If you’re worried about debt it is important to get good advice and not just go to a loan company.