The Money and Pensions Service (MAPS) has warned that the coronavirus outbreak could contribute to a “perfect storm” for many people who are in debt and who also have mental health problems.
Even before the current health emergency, the link between financial difficulties and mental health problems was widely understood. The reasons for this include:
- People might forget to pay bills if they have short-term memory issues
- An inability to concentrate means that people may struggle to read the documentation
- Budgeting is difficult for consumers with reduced problem-solving skills
- A consumer with anxiety issues may not want to check their bills and financial documents
- Mental health issues can cause some people to become more impulsive, so they could make inappropriate purchases and loan applications
- Consumers becoming unable to work due to their condition, and being unable to pay bills and loan repayments as a result
- Addictions resulting in people spending excessive sums on their addiction and having nothing left to pay bills or make loan repayments
- Where the condition is particularly serious, an individual may be unable to manage even essential self-care tasks, like washing and eating, and so cannot possibly hold down a job or check their financial position
Paul Farmer, chief executive of mental health charity Mind, says that 50% of people in problem debt also have a mental health problem.
Mr Farmer commented:
“Both mental and financial wellbeing have been brought to the fore by the coronavirus outbreak. For some coronavirus is having an impact on their mental health, for others, it is a difficult time financially. Many will be facing a double impact of worse mental health and financial insecurity.”
According to previous research by MAPS, around 50% of debt advisers have dealt with a consumer who has threatened to take their own life. Mr Farmer urges credit providers to consider signposting or referring clients with mental health problems to free sources of money guidance and debt advice.
MAPS reports that the number of people contacting its money guidance contact centre rose by 74% in the week following the Government’s imposition of a lockdown on March 23.
Caroline Siarkiewicz, CEO of MAPS, commented:
“In recent years, many discussions have taken place to determine how best to define vulnerability, so that services could more easily identify and support at-risk customers, such as those experiencing mental ill-health. The recent coronavirus pandemic has highlighted what our research has shown for some time: most of us are just one life event away from financial difficulty. Many of our customers in the UK are experiencing that one life event now, in the form of Covid-19.
“We know money matters and mental health are often related and that one can adversely affect the other, and what we understand so far shows that people experiencing mental ill-health have worse financial outcomes. It’s not surprising that, with a decreasing but still powerful dual stigma around the financial difficulty and mental ill-health, there are many barriers for people to overcome in getting help.”
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