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How debt impacts mental health and what to do about it

·Writer, Yahoo Finance UK
Stress caused by money worries can affect anyone. Photo: Getty Images
Stress caused by money worries can affect anyone. Photo: Getty Images

Everyone worries about money from time to time, whether it’s paying off an unexpected bill, a car breaking down or coping with rising living costs.

But for some people the stress and anxiety of money worries can have a serious impact on mental health - particularly for those in debt.

This year, statistics from the TUC found Britain’s household debt now stands at a record average of £15,385 - owed to credit cards firms, banks and other lenders.

According to the Money Charity, people in the UK owed £1,640 billion at the end of May 2019.

It’s no surprise that money and mental health are often linked. Poor mental health can make managing far more difficult, and in turn, worrying about money can make your mental health worse.

READ MORE: Why we need to take mental health days sometimes

A mental health problem such as depression can make it difficult to maintain motivation to keep control of your finances. Things like talking on the phone or opening envelopes from the bank can trigger anxiety, and spending any money - even on essentials like food and heating - can cause extreme stress.

Money worries can also impact relationships too, which can have a knock-on effect on mental wellbeing.

Grace Brownfield, senior public policy advocate at the debt charity StepChange, explains that mental health issues are both a cause and a consequence of problem debt. “Our research has found that a third of our clients had vulnerabilities in addition to their financial difficulties, almost half of which (49%) were mental health issues,” she says.

For vulnerable people, including those with mental health problems, the challenges faced in balancing finances can be much greater. “Compared to non-vulnerable clients, our vulnerable clients are far more likely to be in arrears on a household bill, while 2 in 5 said their illness was the main reason for their debt,” Brownfield explains.

Although stress caused by money worries can affect anyone, studies suggest younger people are particularly at risk. Nearly three quarters of Brits aged 18-34 have at some point experienced mental health or well-being issues linked to money. Common signs include changes in mood, trouble sleeping and feeling anxious or stressed.

Understand your relationship with money

If money worries or debt are affecting your mental health, there are several things you can do.

Firstly, it can help to understand the relationship you have with money - for example, if you tend to spend more unnecessarily if you are unwell. It can help to keep a diary of your spending and your mood too, as they may well be linked. This can help you work out any patterns and help you think about how you spend money.

If you struggle with specific aspects of money management, such as opening letters from the bank, you could ask someone you trust to open your letters for you. They can let you know if any of them are important.

Structuring the way you manage your money can help. Set aside a time every other day or every week to look at your money and bills so things don’t get on top of you. Try to keep all important documents in a folder, such a payslips, bank statements and bills. If you struggle with overspending, try just taking out a set amount of money each week rather than paying for things on a debit or credit card.

There are lots of different organisations that can help you with money and debt problems.

The Money Advice Service provides free and impartial money advice and can help you with debt and borrowing, budgeting, benefits, savings and mortgages.

Citizens Advice can help you with legal or money issues, including benefits, work, discrimination and healthcare.

There are people here to help

It’s also important to speak to someone trusted about your worries, as talking things over can be a relief and help you put things into perspective. It’s not always easy to talk to others about your personal problems, so it can help to write down some notes first. This might be a friend, a relative or a health professional.

Mental health charities such as Mind or the Mental Health Foundation can offer advice and support. It’s also important to visit your GP if you are struggling with your mental health, as they can advise the right course of action for you.

The Samaritans can help you for free on 116 123 if you’re feeling hopeless about the future, or you can email

“We need to see more support across the sector for those with mental health problems who are at risk of, or are currently experiencing, financial difficulty,” says Brownfield.

“With the FCA recently opening a consultation on their guidance for firms around vulnerable customers, we hope to see further positive developments in the coming months.

“For any individual feeling overwhelmed by their financial situation, help can be found on our website,, or by calling us on 0800 138 1111.”

READ MORE: How to handle a panic attack at work

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