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The links between debt and mental health

Money and mental health are closely connected. We speak to thousands of people each year who are feeling depressed, guilty or hopeless about their finances.

But this page isn’t here to make you feel any of those things. Quite the opposite.

We believe that mental health should not be overlooked and we’re here to help solve money worries. Above all else, we know how important it is to speak to someone when money problems arise

How does money affect mental health?

Poor mental health can mean that managing money is harder. Yet, worrying about money can worsen mental health. It can often feel like a catch-22 situation with no way out.

So, how important is your mental health? We think extremely. Mental health affects our emotions, thoughts, feelings and actions. It links to how we handle stress, relate to others and make choices – including our financial decisions.

We’re committed to helping you to get your finances under control and help you to feel confident about managing money. And we know it works. We know that once we’ve spoken to our clients, over 93% say their mental wellbeing improved and stress levels reduced.

The facts

Research by the Royal College of Psychiatrists shows just how many people’s mental health is affected by money and debt.

  • One in four adults will have a mental health problem in their life
  • Half of adults with debts have a mental health problem
  • A quarter of people with a mental health problem is also in debt

In our own research last year, we found being in debt impacted the mental health of around 85% of client’s – causing stress, depression and anxiety.

Common ways that money and mental health can affect each other:

  • Money problems can affect your social life and relationships
  • You may overspend to feel better, as it could give you a brief high
  • Having a mental health problem might affect your insurance premiums
  • A decision to spend money, whether you can afford it or not, can cause anxiety
  • If you’re feeling low or depressed, you may lack motivation to manage your finances
  • Being in debt, or dealing with the benefits system, can cause stress and sleep problems
  • If mental health problems affect your ability to work or study, your income might be affected
  • Certain situations like talking to a bank, opening bills or attending benefits assessments might trigger feelings of anxiety and panic

Understand your money and mood patterns

Understanding your habits when it comes to spending can be valuable. For example, if you know that you tend to go on an internet shopping spending spree when you feel under pressure, then you can start to address that habit.

Sometimes, just being aware of your spending patterns can help you to feel more in control.

If you’re unsure, then try keeping a diary of your spending and how you feel. Write down how you were feeling before spending, and how you felt after. This can really help you to understand any spending triggers and how you truly feel about your spending habits.

Have a think about…

  • When you spend or save money – do you spend more when you’re stressed, sad or feeling happy?
  • Which parts of dealing with money impact your mental health – opening bills, going to appointments, being misunderstood?

Tips to dealing with debt and mental health

If you’re going through a period of poor mental health, dealing with debt can seem like an impossible task. But we can help. At PayPlan, we have a tell us once rule. Once you disclose a mental health condition to one of our advisers, we’ll record this on our systems with your consent. That means you won’t have to repeat yourself if you speak to a different member of the team.

Small tips like this can make a big difference to your experience.

If you are particularly vulnerable or have a long-term condition, then you may be supported by our vulnerable client team. They provide specialist support and can make additional changes to the way you’re communicated with.

If you’re in debt and are struggling with mental health, you may benefit from:

  • Breathing Space – can reduce or stop your creditors from calling you or sending letters chasing you for debts. Have a look at what Breathing Space could mean for you and how to request it.
  • Debt and mental health evidence form (DMHEF) – can help creditors to understand any mental health issues you may be experiencing. It allows them to change the way they contact you or deal with your debts. Download and learn more about the form.
  • Applying for Personal Independence Payment (PiP) and Employment and Support Allowance (ESA) – our benefits calculator will help you find out what benefits you can claim. The calculator is free to use, and the details you provide are anonymous.

How to support good mental health

Our physical health and our mental health are linked. The two don’t exist in isolation. You can head over to our physical health on a budget page for tips on taking care of your wellbeing.

The reason mental health can be overlooked sometimes though is because many people don’t think about it daily. The truth is, we’re all affected by mental health.

It influences our daily decisions, performance at work and even food choices. That’s why money and mental health are also closely connected.

To concentrate on your mental health, try:

  • Talking about your feelings
  • Keeping active – this can really help to boost your energy
  • Eat well
  • Drink sensibly
  • Stay in touch with friends and family
  • Ask for help if you need it

Spotting the signs of poor mental health

It can be difficult to spot if someone is suffering with their mental health. To help, we’ve outlined signs and behaviours you can look out for.

You might recognise these when speaking out, researching (or, Googling in modern terms) or your own thoughts and feelings.

  • Feeling sad, down or like nothing matters
  • Not able to perform daily tasks
  • Eating too much or too little
  • Frequently tired, low or no energy
  • Smoking, drinking or using drugs
  • Extreme mood swings, yelling, fighting
  • Being unusually confused, forgetful on edge angry, upset, worried or scared
  • Thinking of harming yourself or others
  • Hearing voice or believing things that are not true

Get in touch with one of the organisations below if you recognise any of these signs or would like to find out more about seeking support for a mental health problem.

Organisations that can help

If you need help or are concerned about your health, then get in touch with a medical expert. We’ve listed some organisations that may be able to help. Otherwise, contact your GP.

  • Alzheimer’s Society advice, support and information about dementia. Call 0300 222 1122
  • Bipolar UK – the only national charity dedicated to empowering individuals and families affected by bipolar. For support, email info@bipolaruk.org
  • Campaign against living miserably (CALM) is leading a movement against suicide. Speak to a member of the helpline team, call 0800 58 58 58
  • Carers UK advice, information and support for anyone looking after someone in a caring capacity. Call 0808 808 7777
  • Mind advice and support for anyone suffering from mental health issues (e.g. depression, anxiety, bi-polar, suicide ideation, schizophrenia, psychosis). Call 0300 123 3393 or text 86463
  • National Bereavement Service offers help with the practical side of bereavement informing people of the actions they need to take. Call 0800 0246 121
  • NHS website helps you take control of your health and wellbeing. Take a look on the website for more information or for useful medical numbers
  • Samaritans for anyone who needs to talk to somebody anytime they like, in their own way, and off the record – about whatever is getting to them. They don’t have to be suicidal. Call 116 123 or email jo@samaritans.org
  • SHOUT the UK’s first 24/7 text service, free on all major mobile networks, for anyone in crisis anytime, anywhere. It’s a place to go if you’re struggling to cope and you need immediate help. Text 85258
  • Victim Support helps people affected by crime or traumatic events get the support they need.

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