Mental health and debt: supporting the advice sector and creditors

This Mental Health Awareness Week, Jane Tully, Director of External Affairs at the Money Advice Trust outlines the work going on to help the advice sector and creditors support people with debt and mental health problems.

We know that mental problems and debt often go hand-in-hand. Findings from the Money and Mental Health Policy Institute suggest that one in four people with mental health problems has problem debt and that often someone’s financial situation makes their mental health worse. They estimate that people with severe mental illness are 2.3 times as likely to experience money or debt problems.

These are just some of the reasons of why we are supporting Mental Health Awareness Week, hosted by the Mental Health Foundation and running all of this week.

At National Debtline and Business Debtline, run by the Money Advice Trust, we are all too aware of the impact of debt on people’s mental health and vice-versa. Along with taking out too much credit, job loss and relationship breakdown, mental health problems are one of the most common reasons for being in debt. Nearly one in seven of the people helped by National Debtline say that mental health problems are the reason for their financial difficulty – and we regularly hear from people who tell us how being in debt has affected their mental health.

I had a breakdown due to the stress of not being able to pay my debts and the harassment from the people that I owed money to.  – National Debtline caller

And we know the benefits seeking advice can bring:

When I phoned to speak to someone I was in despair. I was quickly reassured by your team member that there was a way out and life was worth going on – they made me feel like I mattered.  –  National Debtline caller

To support people in this situation we produced, with Money and Mental Health, an advice sheet which explains how debt and mental health can affect each other. The advice leaflet outlines different approaches to deal with debt and specific routes including the use of the Debt and Mental Health Evidence Form (a form that people can use with their creditors to explain their mental health issues  when negotiating debt repayments).

In the last year we have also started working with Mental Health and Money Advice (supported by Rethink Mental Illness and funded by Lloyds) in referring people who call our services to more specialist mental health support if needed.

But the work doesn’t stop there. While the right support for clients is crucial, advisers also need to understand the specific problems clients may face and how to help them. Our debt and mental health training course, run through Wiseradviser, equips advisers with an understanding of mental health problems clients may have and how this can affect their ability to deal with debts. The course also draws upon the MALG Mental Health Guidelines and how to apply them to negotiate with creditors.

And there is also an important role for creditors to play in identifying and supporting customers with mental health problems –  often the first point of contact for people in debt. Alongside the Trust’s vulnerability lead, Chris Fitch, we have developed a course for creditors on how to support customers with mental health problems. This focuses on frontline staff, equipping them with the tools they need to recognise common mental health problems and to understand their role in helping customers to get the help they need. This includes explaining the difference between a range of mental health problems, through to practical ways to deal with an initial disclosure about mental health.

From what we are seeing, through our work with creditors and the advice sector, positive progress is being made. Knowledge of the links between debt and mental health is increasing, and importantly so are the ways firms support people in debt. Nevertheless, this focus needs to continue – and thankfully will due to the Money Advice Service’s new focus on people with mental health issues in their commissioning strategy. Campaigns such as Mental Health Awareness Week are crucial in continuing to shine a spotlight and raise awareness. But it is the support and training for debt advisers and frontline creditor staff that are crucial in improving the support for the people who need it most.

At National Debtline, we know the impact the right support can have. Just under 80 percent of our clients said that taking actions after contacting us had a positive impact on their emotional or mental health. Knowing who to turn to and what action to take can be the first step in improving someone’s situation.

Further information about our resources to help creditors to support customers in vulnerable situations is available here.

The FinCap blog is a place where individuals and organisations in the financial capability community can share their views on issues which are connected to money management. The Money Advice Service (MAS) acts as host and editor for the blog. The views contained in these blogs are those of the authors and do not necessarily reflect the policy or position of the Money Advice Service.

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