In a cost of living crisis we need to do more to limit the impact of financial insecurity on mental health
3 min read
One in four of us will experience a problem with our mental health at some stage of our life. We also know that for those who are affected, having concurrent financial problems will almost invariably make things worse
So, particularly in the context of the current cost of living crisis, it is important to develop policies that recognise and respond to the relationship between financial insecurity and the problems that too many people face with their mental health. Among the measures required, there should be an amendment to the Financial Services and Markets Bill, currently before the Lords, which recognises the specific needs in this area for people struggling with their mental health.
It is estimated that people with mental health problems are nearly twice as likely to be living in poverty than people without mental health problems. They are nearly three and a half times as likely to be in problem debt. Two-thirds of people claiming Employment and Support Allowance suffer from a type of common mental disorder. These difficulties arise from a combination of factors, such as simply struggling to live on a low income; having to deal with unemployment or insecure employment; the struggle to access the benefits and treatments that they are due; and unexpected loss of income through periods of absence due to sickness.
At the same time as being poorer, people facing problems with their mental health end up having to pay more for essential financial services, such as banking and insurance. And, all too often, the services that they do receive fail to meet their specific needs.
It is estimated that people with mental health problems are nearly twice as likely to be living in poverty
Services are also more difficult to access, with three quarters of consumers who experience mental health problems having trouble engaging with services though channels others may take for granted, such as the internet or even just the telephone.
Experiencing a mental health problem makes it much harder for people to manage their finances. Aggressive debt collection tactics leave people with feelings of hopelessness and despair. These are the barriers that people face in accessing the support to which they are entitled from the benefits system. For example, as identified by the Money and Mental Health Policy Institute in its Set up to Fail campaign, it needs to be much easier for people who are struggling to get the support they need from family and friends to manage their Universal Credit account.
The Financial Services and Markets Bill, which at the time of writing is being considered by the Lords, provides an opportunity to address the many financial problems people have, as well as their mental health. Among the issues being debated in the bill’s passage has been the responsibilities of financial services providers to care for their clients. It is clear that the sector certainly needs to do more to recognise and understand the nature and scale of these problems.
What is needed in the bill is an explicit obligation on the providers of financial services to act responsibly towards its customers who have mental health problems. They should be required to exercise a duty of care towards their customers and to take active steps that will minimise the potential difficulties faced by those who have or are at risk of having mental health problems that are associated with their finances. Obviously this will be of benefit to the individuals concerned – but it will also relieve much of the pressure on our mental health services provided by the NHS and, finally, it will be of benefit to the financial services industry itself, in reducing the incidence of bad business.
Lord Davies of Brixton is a Labour peer
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