The “extremely worrying” link between mental health problems and financial difficulties has been highlighted in a new report.
Research by the new policy institute Money and Mental Health shows that mental health problems make people’s financial situation worse in 72% of cases.
The study, which is based on the experiences of nearly 5,500 people with mental health problems, is thought it be the largest of its kind.
93% of those surveyed said they spend more when they are unwell and 92% find it harder to make financial decisions.
More than half (59%) say they have taken out a loan while unwell that they wouldn’t otherwise have done.
Nearly three quarters (74%) of people with mental health problems put off paying bills when they are unwell and more than half (53%) have ended up seriously behind on payments for at least one bill or loan agreement.
Martin Lewis, chair of Money and Mental Health and founder of Money Saving Expert, said: “We know financial difficulties can have a serious detrimental impact on mental health, but this report now shows conclusively that it goes both ways – mental health problems can devastate our finances too.
“It’s clear from the study that people with mental health problems are spending more when they are unwell, finding it harder to make financial decisions and in the worst cases, actually taking on new credit that they otherwise wouldn’t have done.
“This is extremely worrying. Our vision is of a world where mental health problems don’t lead to financial difficulty, and where problems with money can be managed without long-term impacts on our mental health.”
Mr Lewis said policy makers and financial services providers need to take the issue seriously and start coming up with practical solutions.
Polly Mackenzie, director of Money and Mental Health, added: “The financial services and retail industries need to recognise that a quarter of their consumers have a mental health problem every year – and they may need extra support or protection to stay financially healthy.
“People with mental health problems do not deserve to be written off to a life of financial difficulty.”
Caroline Siarkiewicz, head of UK debt advice at the Money Advice Service, said: “We know that mental health issues and debt can go hand in hand.
“Our own research shows that over half (52%) of clients who have received debt advice from Money Advice Service-funded partners also have a mental health condition.
“Given the scale of this problem, it is essential that the debt advice sector continues to work with creditors and utility companies to ensure that outcomes are improved for consumers.”