Return of the Great Depression causing great depression

Posted Sunday 11 May 2008

In the red: debt and mental health

• 91 per cent said debt has worsened mental health
• 87 per cent rely on credit to pay for food and everyday costs
• 83 per cent harassed by creditors when unwell

Leading mental health charity Mind today publishes a shocking new report that shows that debt is a significant factor in worsening our mental health. As the credit crunch hits and the cost of living soars, this worrying new evidence shows the extent of debt's impact, with over 50 per cent of respondents going without food and heating.

'In the red: debt and mental health' (1) is the first ever report to specifically examine the links between mental distress and debt. It includes a survey of over 1,800 people. Of those with problem debt (924 respondents), 91 per cent said that debt had worsened their mental health. It also highlights that people with mental health problems are almost 3 times more likely to be in debt (2) often as they are living on a low income or can't work - due to difficulties getting a job because of stigma (3) or due to ill health.

Mind found that of those with problem debt:

• 71 per cent ran out of money every week or most weeks

• 87 per cent rely on credit to pay for food and everyday costs

• 56 per cent had gone without food due to debt

• 51 per cent had gone without heating

• 92 per cent reported not being able to socialise

• Over 50 per cent were living on a weekly household income of less than ?200 - what the Government defines as 'living on the poverty line'.

Mind's recommendations include:

• Bank and debt-collection agency staff to receive mental health awareness training.

• Banks to adopt a flagging system where customers can choose to have their account monitored for erratic spending to better protect their finances

• An inquiry into bailiff practices as they relate to people with mental distress.

Mind has launched a training programme for our local Mind associations across the country so that they can deliver financial surgeries.

Today, Mind's Chief Executive Paul Farmer said:

"UK personal debt stands at a staggering ?1.4 trillion but the real cost here is that on our mental health. Money worries aren't just keeping people awake at night; they are causing high levels of stress, depression and in some cases self harm and suicidal thoughts. At a time when people across the country are anxious about their finances, debt-depression is a real and growing concern."

"People living with mental health problems are particularly vulnerable to being trapped in a cycle of debt and poverty. With many unable to work due to ill health, Mind has found that people are becoming dependent on credit to pay for everyday essentials. Those on lower incomes are also more likely to only be able to get credit from lenders who charge astronomical interest rates. This is a worrying trend as people are left facing a debt mountain that they have no means to repay."

"If we are going to tackle this massive inequality and really help people who are struggling with mental health problems and debt then we need to see action by banks, debt collection agencies and other creditors. Changes in practice such as waiving fees when a customer has been too unwell to manage their finances and introducing mental health awareness training for bank staff will make all the difference. Creditors have a duty to help not hound their customers, especially when they are coping with serious health problems."

• Poorest face highest cost - low income and poor credit ratings mean people may only be able to borrow from private or doorstep lenders who charge extortionate interest rates, some as high as 400 per cent, contributing to their spiral of debt

• Bipolar and debt - People with bipolar disorder, which can cause people to spend extravagantly during a manic phase, or schizophrenia, are 4 times more likely to be in debt than the rest of society.

• Harassed to breaking point - Fewer than 1 in 3 people with problem debt informed the organisation to which they owed money of mental health problems because they did not think that they would be understood (63 per cent) or believed (47 per cent). 83 per cent of those who did tell creditors continued to be harassed about debt repayments. In one case, a woman was called at 15 minute intervals for 13 hours.

• Seeking help - 34 per cent of people with problem debt did not seek advice for their debt problems, often because they did not know where to turn.

Mind's campaign is backed by:

Moneysaving expert Martin Lewis (founder of the website www.moneysavingexpert.com), is working with Mind on a new advice booklet on financial difficulty and mental health issues. Martin said: "Severe debt isn?t just a financial problem. It causes relationships to break up, people to lose their homes and families to break down. No matter who you are, it can send you to the pits of despair. There is a clear correlation between those in debt and those with mental health problems. Most people have either had issues themselves or have a family member who has. This is a growing blight on our society and one we have to tackle."

Benjamin Fry, presenter of BBC programme Spendaholics, said: "It's often the way we feel and our mental health that influences the way we spend our money or look after our finances. Money has powerful unconscious associations and the way we use it can often be an attempt to communicate some deeper distress. That needs listening to, otherwise the behaviour just continues, often escalating in an increasing cry for help."

1. Mind (2008) In the red: debt and mental health (PDF).

2. Office for National Statistics (2002) The Social and Economic Circumstances of Adults with Mental Disorders

3. Department of Work and Pensions (2001) Only 37 per cent of employers said they would employ someone with a mental health problem.

4. Collard S. Kempson E. (2005) Affordable credit. The way forward.

5. Office for National Statistics (2002) The Social and Economic Circumstances of Adults with Mental Disorders

Notes to editors

1. Mind's new research 'In the red: debt and mental health' was conducted by the Royal College of Psychiatrists. It includes the results of an online and postal survey across England and Wales completed by 1,804 people. All respondents had experience of debt and mental health problems. It also includes qualitative data gathered at eight focus groups involving 56 people. 924 of the respondents reported problem debt (someone who has been 2 or more consecutive payments behind with a bill in the last 12 months). Previous studies have simply included reports on people with 'debt', Mind's survey uses a more robust definition of 'problem debt'.

2. For more information on debt and mental health, to arrange an interview or speak to one of Mind's case studies on this issue, please contact the Mind media team on 020 8522 1743 or email press@mind.org.uk. ISDN: 020 8221 0817.

3. Please note that Mind is not an acronym and should be set in title case, not caps.

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