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Finances And Mental Health

21 May 2018

Elaine Jefferys, Money Services Manager at The Charity for Civil Servants talks with Sarah Porretta, Director of Financial Capability at the Money Advice Service (MAS) about the link between managing finances and managing mental health.

Most people would agree I’m sure, that we could all benefit from improved knowledge and confidence when it comes to dealing with our finances. Every financial decision we make has an impact on both our present and future financial wellbeing - so surely we should be taking the time to make sure we make the right decisions?

But are we? We know that less than 3 in 10 of the UK working age population have savings of three months income or more.

EJ: Last week was Mental Health Awareness Week, so now is the perfect time for us to be talking about mental health and money. What are MAS doing to help people struggling with money and mental health problems?

SP: During Mental Health Awareness Week, we were urging people to look out for signs in their families and friends – as well as looking to recognise signs in themselves – that might indicate problems with money and mental health. Signs might include a change in mood, increased tiredness or lack of sleep, being anxious, stressed or lacking confidence to directly contact the bank or financial service provider, and spending more money than is available.

As the biggest funder of debt advice in the country, our figures tell us that more than half of the people that contact debt advice funded by MAS report that they have been diagnosed with a mental health condition – almost three times the UK average. But we know that the link can go both ways. Our research shows that more than half of the UK population have experienced poor mental wellbeing as a result of concerns about money. And two thirds of us have been worried about a loved one’s mental wellbeing linked to money worries.

Whether it’s finding everyday tasks hard, like keeping on top of bills and bank statements, or finding yourself missing payments, help is available. Talking to someone, and taking the time to focus on your own wellbeing, is a really difficult but hugely important first step. There is a wide range of guidance available on our website, including our Debt Advice Locator tool, or you can reach out to our mental health partners including MIND, the Samaritans, the Mental Health Foundation or Mental Health UK.

EJ: How is the Financial Capability Strategy addressing this?

SP: That’s exactly the challenge. We know 12.9 million adults have no savings to fall back on, and 6.4 million adults across the UK have to borrow regularly to buy food or pay bills, so the approach with the Strategy is about acknowledging that it is a marathon not a sprint. And the starting point for us has been making sure that we have robust evidence on what works to help people improve their money management skills – and just as importantly, what doesn’t. We then need to work across sectors and communities to get this message out and walk the walk of turning the evidence into action. So the Strategy is very much about demonstrating the power of collective impact and understanding the role we can all play – as individuals, as organisations, and as employees and employers - to improve the financial capability of the people in our communities.

EJ: Products and services are constantly changing and working out the best deals can be a minefield. Financial capability can give us the tools needed to help us make decisions but we know that as a ‘concept’ it can sound intimidating. How do you think people can be engaged more effectively?

SP: There is no silver bullet for this, but we have ensured there is a genuine partnership approach with cross-sector ownership. We have a fantastic FinCap Board and seven FinCap Steering Groups representing all different life stages that engage a really broad range of organisations – from charities to banks – and forums in Wales, Scotland and Northern Ireland to ensure we are reaching out across the whole of the UK.

The next step has been putting energy – and funding – into trying to answer the question of the best ways to engage different groups of people. MAS has invested over £11million in a What Works Fund to trial new approaches, as well as applying behavioural science techniques to some of our most common money management challenges through the Financial Capability Lab, and are focussing on working with partners to explore the best channels – and language – that resonates with different groups.

All this learning will be available on our Evidence Hub, because we know that we can’t do this alone. We absolutely need to work with and through others who are seen as trusted messengers and that’s why it’s fantastic to see The Charity for Civil Servants picking up the mantle and championing the importance of Financial Capability to its members.   

EJ: Elements of financial capability have been incorporated in the money advice process for some time. In many ways, it’s the key to successfully managing debt and, in the longer term, avoiding financial difficulties. That’s why the Charity’s financial capability campaign has focused on the importance of better financial capability for everyone, whatever their circumstances. What is MAS doing to make this message relevant?

SP: We think one of the most important things we can do on this is actually one of the simplest – to start everyday conversations about money, from pocket money to pensions. So while we want to make sure people know they can rely on the Money Advice Service to help build their financial capability, whether that’s through our website, call centre, or funded debt advice, we have a body of research to back up our instincts that the messenger is just as important as the message. That’s one reason we run FinCap week, with the next one coming up 12-18 November, and why we are working with employers, charities and the government to make sure more people feel comfortable and confident to talk about money. Because it isn’t just about people’s financial health – we know not being able to manage your money can have a huge impact on wellbeing, so as employers, family and friends, we all need to talk money more often.

If you are struggling with a mental health or money issue, we have a wide range of resources in our Mental Health and Wellbeing section. Alternatively, you may find our Money and Financial Capability sections useful.

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