Around half of UK adults felt more anxious or stressed in January because of the rising cost of living, the Financial Conduct Authority has found, showing the impact of money worries on mental health is becoming more acute as high inflation persists.  

 

As Mental Health Awareness Week is underway, charities and regulators are highlighting the heavy toll that inflation is taking on people’s wellbeing. Follow-up interviews to the FCA’s Financial Lives 2022 survey, which will be published in full later this year, showed the cost of living means 28.4m people were more anxious or stressed in January than they had been six months earlier. A high proportion also lost sleep over money worries (28%), and a quarter said their mental health has suffered (24%). 

 

Some of the statements by respondents to the FCA survey are harrowing, with people saying the cost of heating is leaving them close to hypothermic, and loneliness becoming a growing issue because of transport expenses. Others are reporting the effects of money problems on relationships and having to skip meals, or becoming financially insecure because they had to support family members. 

 

One woman said that “much higher rent in particular means I have less money after outgoings to put towards savings, investments or a mortgage deposit”. 

 

The Pensions and Lifetime Savings Association says pension funds are well placed to support people with guidance. 

 

“Financial education and understanding are imperative, especially during economic hardship. Given the important role that pensions play in securing savers’ financial future, schemes are well positioned to provide support to savers and direct them to relevant information that may give people more confidence over their financial lives now and at retirement," says Joe Dabrowski, deputy director for policy.

  

Pension schemes can also signpost savers to wider support already available or work with the employer to provide additional benefits to members, he says, for example with employee assistance programmes, partnering with debt charities or highlighting government-led initiatives. 

  

The PLSA will publish guidance outlining the ways schemes can support members with their mental health and financial wellbeing due to cost of living pressures, Dabrowski adds. 

 

 

The FCA’s findings echo what mental health experts are seeing. A new survey for charity Mind has found that the mental health of half (48%) of people in England and Wales has been negatively affected by the cost of living crisis, rising to nearly three quarters (73%) for those with existing mental health problems. More than half (56%) of those negatively affected say it has made them more anxious. Worryingly, a minority of them have seen a GP and even fewer have accessed online resources.

 

As well as being more anxious, people are reporting feeling more stressed (55%), nearly half are feeling more depressed (45%), and a third are feeling lonely (33%). All of these figures are higher for those with existing mental health problems.  

 

Money worries and mental health are often compounded where people are in poor physical health, limiting their ability to work and take part in social activities, as NHS services are struggling to meet demand. 

 

Around one in four suffers from poor mental health each year, according to Mind. The Office for National Statistics says the number of people who are economically inactive because of long-term sickness increased to a record high. Speaking about poor mental health openly is, however, still the exception rather than the rule. 

 

Matt Rimmington, a 24-year-old who has suffered anxiety, depression and post-traumatic stress disorder, says: “The stigma around mental health stops me from reaching out, going so far as to sometimes thinking that I don't have any real issues worthy of notice, so I shouldn't talk about them with anyone because they’ll think I’m being dramatic or seeking attention.”  

 

Looking after our mental wellbeing is often last on our list, says Mind’s chief executive Sarah Hughes. She urges people to get help if they are struggling. 

 

“We know we can’t fix the cost of living crisis, but support for your mental health is out there, and we are here for you,” Hughes says. 

 

Mind runs an infoline, online community, 'Side by Side', and has information available on its website. It offers advice for managing money for those struggling with mental wellbeing, such as checking if someone is entitled to extra money and helping to claim it, as well as supporting people with understanding their money and mood patterns. 

 

Sarah Murphy, the Money and Pensions Service's mental health policy lead, says money and mental health are closely linked and one often affects the other, which can quickly become overwhelming. 

 

“We also know that someone with mental health difficulties is more likely to be in problem debt, struggle to keep up with bills and have no savings, leaving them without a financial safety net,” Murphy says. 

 

The FCA found that the number of people struggling to meet bills and credit repayments has risen by 3.1m since May 2022 to 10.9m, and the number of adults who missed bills or loan payments in at least three of the last six months has also gone up by 1.4m to reach 5.6m.  

 

Creditors in financial services, utilities and the public sector can support those struggling by giving extra training to staff, showing more consideration when chasing payments and making it easier for people to get in touch when they need help, Murphy said.  

 

MaPS offers a Mental Health and Money guide to show organisations what they can do to assist these customers. 

What can pension funds do to help members struggling with mental health?