The researchers based at the Money and Mental Health Policy Institute used Understanding Society to look at people’s experiences of financial and mental health problems from 2019-2022, covering the period just before the pandemic up to the start of the cost of living crisis.
The Institute says more needs to be done to support people experiencing the long-term cycle of money and mental health problems. The researchers said, “An extended struggle with either mental or financial health heightens the probability of one impacting the other.”
Specifically, the report examined how people aged 25-54 (i.e. prime working age) experienced this combination of issues differently depending on whether they faced them on a short term (1-2 years) or long term basis (3 or more years).
The charity’s analysis of four years of nationally representative data spanning this period demonstrates clearly that experiencing mental health problems on a long-term basis has a very marked and detrimental impact on people’s financial wellbeing.
People who experienced mental health problems for three or more years faced significantly worse income, employment and debt outcomes – compared to both people who have never experienced a mental health problem, and those who experienced mental ill-health on a shorter basis during this period.
In particular, the report highlights that people aged 25-54 who had long term mental health problems in this period were:
- Nine times more likely to have struggled financially than people who have never experienced a mental health problem. This is significantly higher than people with shorter mental health problems, who were just over three times more likely to have struggled financially than people without mental health problems.
- Eleven times more likely to have been out of work due to illness or disability than people without mental health problems. Again, this is a significantly higher likelihood than for those who experienced mental health problems for a shorter period of time – who were five times more likely to be out of work than those without mental health problems.
- More likely to have had low incomes – with an average income gap of £3,360 a year compared to people without mental health problems. For people with shorter-term mental health problems, the average annual income gap was £2,376 compared to those who have not experienced mental health problems.
- Nearly four times as likely to have been behind on bills than people without mental health problems. In contrast, people who experienced mental health problems for a shorter period of time were nearly twice as likely to be behind on bills than those who haven’t experienced mental health problems.
The research shows that in total, nearly 800,000 people experienced both long term mental health problems and long-term financial difficulties between 2019-2022.
Conor D’Arcy, Interim Chief Executive at the Money and Mental Health Policy Institute, said:
“With the cost of living crisis coming hot on the heels of the pandemic, the last four years have been a car crash for many people’s finances and mental health. Rates of mental health problems continue to be higher than before the pandemic, while the rising cost of food and other essentials have made finances a source of daily worry and anxiety.”
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