23 Nov 2023 | Posted In Money advice news

New research by The Health Foundation explores how debt can affect health during the cost-of-living crisis. The key findings from the report were:

  • Being in problem debt is associated with worse health outcomes. People in problem debt are three times as likely to report that their health is ‘bad’ or ‘very bad’ (21% compared with 7% for those not in problem debt).
  • People struggling with debt can have less income available to spend on health-promoting activities, can experience stress and worry about being able to cope with repayments and engage in health-harming behaviours as a coping mechanism – all of which can affect their health.
  • Worse health also increases a person’s likelihood of experiencing persistent debt problems. Only 56% of people with poor health and a heavy debt burden no longer had one 4 years later, compared with 71% of people in good health.
  • The cost-of-living crisis is far from over. Although inflation rates have started to fall, the Consumer Prices Index was at 4.6% in October 2023 and price levels remain significantly higher than 2 years ago. Food and energy prices were respectively 28% and 22% higher in October 2023 than in October 2021.
  • The combination of sustained high price levels and higher interest rates risks worsening people’s problem debt and, as a consequence, their health.
  • Household indebtedness has not increased compared with pre-pandemic levels. However, evidence shows that there have been different impacts from the cost-of-living crisis across the UK population. By March 2023, 19% of adults in households with lower incomes were behind on priority bills and 23% had no savings. Both factors put them at risk of falling into problem debt.
  • Government needs to focus on alleviating repayment requirements for debts to the public sector, especially through Universal Credit deductions, and ensuring benefit rates rise in line with September inflation to support the incomes of the poorest households.

Read more here.