09 May 2022 | Posted In Money advice news

To mark the start of #MentalHealthAwarenessWeek, Money and Mental Health Policy Institute has published analysis based on new nationally representative YouGov polling, which looked at how the cost of living crisis is affecting the financial and mental wellbeing of people across the UK.

The polling shows that 73% of UK adults have had to change their financial behaviour due to the rising cost of living. For example, 46% say they have cut back on essential spending, while 61% say they are using less energy such as gas or electricity at home.

The polling also shows that these factors are having a huge impact on people’s mental health as well as their finances:

  • 59% of UK adults say that the cost of living crisis has had a negative impact on their mental health, such as leaving them feeling anxious, depressed or hopeless.
  • For some people, the psychological impact has been particularly acute, with more than 1 in 5 (21%) saying they have felt “unable to cope” due to rising costs. If reflected nationally, this amounts to 11m people across the country.
  • Nearly 9m people say they dread opening post from creditors such as banks, energy companies.
  • Previous Money and Mental Health research revealed the strong link between financial difficulty and suicide — with people who are in problem debt three times more likely to have considered suicide than those without problem debt (2).

Money and Mental Health is calling for urgent action from government, energy firms and regulators to ease the immense financial and psychological pressures that people are facing:

  • The government should immediately step up support for people who are struggling financially during the cost of living crisis. Existing government support measures such as the £200 energy bills discount and the council tax rebate are inadequate. The government should consider increasing the generosity of those measures, and increasing benefits payments in line with inflation.
  • Energy firms should make their letters to people who are behind on payments less threatening and more supportive. Making small changes such as adding clear and prominent signposting to sources of support would make a big difference in reducing the distress that these letters can cause.
  • The energy regulator Ofgem should ensure energy firms provide clear signposting to support in letters to customers who are in debt. Ofgem’s rules require firms to offer clear signposting in letters to customers who are behind on payments, but the regulator’s research suggests that some firms are not doing so properly. Ofgem needs to step up action to ensure firms comply with these requirements, and to levy harsh fines on those that do not.

Commenting on the research, Martin Lewis — Chair and Founder of the Money and Mental Health Policy Institute — said:

“We already knew the cost of living crisis is wreaking havoc on people’s finances, but now we know it’s causing devastation for their mental health too. Frankly, I’m terrified that we are on the edge of a full-blown national mental health crisis, especially given the strong links between money problems and suicide. 

“I’ve said before that I’ve nearly run out of tools to help ease the pressure on people. We need political intervention to support people with both their finances and mental health, and we need it now — otherwise the cost of living crisis is going to start costing lives. 

“Energy firms have a crucial role to play too. People tell us that they dread opening the letters they get from energy firms and other creditors, and that these letters can act as a trigger that can contribute to them becoming suicidal. 

“That’s why it’s so critical that energy companies make their letters to struggling customers less threatening and more supportive. It’s not an exaggeration to say that making relatively small changes to these letters now could save lives.”

Read more here.