A new report has found there is a marked correlation between personal debt and poor mental health. The Mental Health Foundation recently produced a report called "Primary care guidance on debt and mental health", and found the majority of problems originate from financial illiteracy and a fundamental lack of access to debt help.
The report reveals that virtually half of those with mental health issues have debt problems; this compares to just 15% of the population as a whole. This latest study also found a correlation between the amount of creditors; those with at least five separate debts are as much as 600% more likely to have a mental health related issue.
A clear link has been established between poor mental health and personal debt problems across a variety of recent reports from leading UK charities and government organisations, building further concern about the issue.
A health study by the Government's Warm Front programme indicated that those who experienced difficulty paying their utility bills were 400% more likely to struggle with depression and anxiety issues. Reducing utility usage and disconnection are three to four times more likely to be associated with an individual with a mental disorder.
In addition, a Civil and Social Justice survey found that 44% of personal debt problems led to physical or stress-related ill health. The cost to the National Health Service (NHS) was approximately £50 per 'difficult to solve' debt issue. This may not sound like much per person, however but the cost of this has been calculated at well over one hundred million pounds.
There is evidence from this hew study to show that improving financial literacy can also improve a person's overall mental health. The evidence states that well-being can be improved by 5.6% while the amount of life satisfaction can increase by 2.4%. Even more positive is the news that improving financial literacy can reduce the likelihood of depression and anxiety by as much as 14.7%.
The highest level of personal debt in the United Kingdom is experienced by those with from mental health problems. About 25% of British adults with a mental health issue reported serious difficulty in paying bills during the last year according to the study. Alarmingly, this is 300% more than a struggling wider British population.
The National Debtline service discovered that 89-94% of all the clients that they assisted in the previous two to four years reported a marked improvement in their overall physical and mental well-being. This is a strong indication that a people who seek debt advice for their financial problems are significantly better off than those who struggle alone.
Meanwhile, other research by Mind has found that the majority of people with mental health issues would be happy to have their mental status taken into account when being assessed for credit. The majority of creditors don't have an understanding of or experience with mental health issues. This regularly results in action being taken by creditors that serves to exacerbate existing problems.
A government investment in financial education would clearly have a number of positive social implications. Personal debt can feel like a form of entrapment that is impossible to escape. However, improved financial planning skills may mean that a Debt Management Plan (DMP) or Individual Voluntary Arrangement (IVA) can help to get family finances back under control.
Personal debt is caused by a number of factors, including divorce, unemployment, accidents, increased expenses and poor financial management skills. The global economic crisis has exacerbated financial difficulties for many individuals as it happened at a time when income-to-debt ratios were unsustainably high.
Useful links: Debt Advice
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