Topic overview: mental health

• Mental health problems can affect financial wellbeing, and financial difficulty can affect personal wellbeing, creating a self-reinforcing cycle.
• Social and economic circumstances influence both mental health and financial wellbeing.
• Debt collection practices can add significantly to psychological distress.
• People with mental health problems face barriers to talking about money and seeking advice.
• People’s mental wellbeing improves a few months after debt advice.

Mental health and financial wellbeing are ‘inextricably linked’. With one in three UK adults experiencing mental health problems in 2021, understanding the relationships between money and mental health can help us know how to help people manage their everyday finances.

MoneyView 2026 showed that people with recent mental health problems have poorer outcomes across every financial measure, including:

• using credit for essentials
• bill payments
• saving and resilience
• pension understanding and planning
• financial confidence.

This means they are less likely to save regularly, have less savings, and are more likely to be in financial difficulty and to have problem debt.

They are also less likely to be employed, and earn less than the average UK adult. As a result, people with recent mental health problems are among the most likely to need debt advice.

People can struggle to concentrate, process complex information, solve problems and take action. Motivation and memory can be affected, making it harder to plan ahead.

Everyday tasks like budgeting and managing payments can become more difficult, while impulsive spending or avoiding tasks (such as opening mail, checking statements or talking to bank staff) can become more likely.

People may also feel anxious about their finances and less confident managing their money.

A lack of money can be distracting and impact reasoning, impulse control and decision-making.

Money worries are linked to stress, anxiety, unhappiness and ongoing emotional strain which affects wider wellbeing. Problem debt can also affect personal wellbeing - nearly half of all adults with problem debt have a mental health problem.

Feelings of personal blame and inadequacy add to the double stigma of financial and mental health problems, creating a vicious cycle. Research also points to a potential pathway between problem debt and an increased risk of suicide.

This includes young adults, renters and those who have children living with them. Symptoms of depression, in the context of higher costs of living, are also higher among women, disabled adults, single-person households, the economically inactive and unpaid (full-time) carers.

Women in minoritised ethnic groups are disproportionately more likely to experience certain mental health problems, though this may reflect gender or cultural differences in seeking help.

People living in the most deprived areas of England are more likely to report symptoms of depression, and those without savings often experience higher levels of distress. Households with a disabled family member also reported worsening mental health as a result of cost-of-living increases in 2022.

Women with mental health problems are more likely than men to feel a negative impact from financial difficulty on their mental health, yet they are less often asked as part of mental health treatment whether their condition affects their finances. People who died by suicide after experiencing economic adversity are highly likely to be male, middle-aged and unemployed.

Minoritised ethnic groups are more likely to experience poverty and deprivation, and may face additional barriers accessing the benefits system and the right financial services, alongside the stigma of talking about money and mental health.

Financial abuse further highlights the two-way link between financial difficulty and mental health: mental health problems can increase vulnerability to coerced debt, while coerced debt itself can impact victim-survivors’ mental health.

The period following the outbreak of Covid-19 in 2020 saw increases in mental health problems in the UK, both in terms of the numbers of people experiencing them and the levels of anxiety experienced. Personal debt also increased, and those with mental health problems were more likely than those without to have struggled with payments on bills and credit commitments.

Similarly, the cost-of-living crisis which began in late 2021 was linked to increases in the number of people struggling with mental health problems, as well as increased financial difficulty. People with mental health problems were more likely to experience hardship and financial difficulties.

Nearly half of all people who are behind on payments report feeling harassed or overwhelmed by the volume of contact they receive from their creditors. A quarter are contacted by their creditors every one to two days.

The mental health impact of debt collection practices is driven by five key factors:

• stigma
• insensitive practices
• communication tone
• communication frequency
• cumulative contact from multiple creditors.

Driven by shame, stigma and low confidence, it’s harder to seek help early which can worsen both financial and mental health outcomes. However, we see that good conversations can help improve mental health and wellbeing.

Over 1.7 million people receive debt advice in the UK each year, and over a third of them disclose a mental health problem. However, an estimated four in ten debt advice clients with a mental health problem do not disclose it.

Barriers to seeking support include stigma, lack of awareness of available support and the accessibility of services. However, people’s mental wellbeing can sometimes increase slightly a few months after debt advice. Subjective wellbeing is higher when debt advice has helped people become, or feel they can become, debt free.

Stakeholders have suggested integrating debt and mental health support, encouraging financial services providers to:

• embed more proactive, person-centred support into their processes, and 
• place clear limits on how often creditors can contact people about missed payments. 

There is also the need to address more systemic issues around financial wellbeing, including by promoting saving, which both builds financial resilience and is linked with higher mental wellbeing.

There are gaps and limitations in existing evidence, particularly in understanding  the causal relationships between mental health and financial wellbeing. Future research might consider how the relationship varies across key demographic, socio-economic and mental health characteristics, the intersections between these, and the mechanisms driving them.

Other unanswered questions relate to the role of people’s beliefs about their circumstances and how to take the anxiety out of money.

Research could also explore:

• how to support people with both mental health and financial wellbeing problems to engage with advice
• how services might be delivered to take better account of, and potentially address, both needs, and 
• the long-term impact of intervention.

Key sources informing this overview are:

• Money and Mental Health Rapid Evidence Review - Centre for Personal Wellbeing, Aston University (2023)
• 'Seeing through the fog': How mental health problems affect financial capabilityOpens in a new window - Holkar (2017)
• Consumer debt and mental health, POSTnote 732Opens in a new window - Lally (2024)
• UK Adult Financial Wellbeing Survey 2021: Mental Health Report - Money and Pensions Service (2021)
• MoneyView 2026 - Money and Pensions Service (2026)
• Debts and Despair: How debt collection practices cause psychological harmOpens in a new window - Murray and Bond (2023)

You can also see:

• our full list of topic overviews, covering a range of themes related to financial wellbeing 
• our financial wellbeing evidence hub, a database of research and evidence.

This overview has been prepared with reference to a wide range of literature, including an earlier series of thematic reviews produced for the Money and Pensions Service by the Centre for Personal Financial Wellbeing at Aston University.