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Money problems and mental wellbeing

There’s often a link between struggling with money and mental health problems. Feeling low can make it harder to manage your money and worrying about money problems can affect your mental wellbeing. If you think money matters are affecting your mental health, this guide is for you. The sooner you can begin to think about and tackle your money problems, the easier it’ll be to take control.

What is poor mental wellbeing?

Experiencing poor mental wellbeing means feeling sad or stressed or finding it difficult to cope with daily life. You may feel like this for many reasons: bereavement, loneliness, relationship issues, money, health or work problems. But there might also be no clear reason for it. Whatever the reason, it can happen to anyone, at any time and for any length of time.

How poor mental wellbeing can affect the way you deal with money

Feeling depressed, stressed, anxious or experiencing mania can make it difficult to manage money. For example:

  • You might find it harder to make budgeting and spending decisions.

  • To make yourself feel better, you might spend money you don't have on things you don't need and then regret it later.

  • You might feel anxious or stressed about talking on the phone, going to the bank or opening your bills.

  • The symptoms of a mental illness might cause you to behave impulsively like spending a lot of money all in one go. 

Any of these problems can be made worse if your income goes down, for example, if you have to stop or take time off work because you’re unwell.


How to tackle your money worries

It’s normal to experience money worries, but it’s better to face them rather than ignore them.

Below is a list of things you can do to get your finances back on track. 

  • Online shopping sites often remember card details to make it easier for you to buy things when you go back to them. If you feel you’re at risk of making impulsive spending decisions you will later regret, removing this auto-filled information from your web browser can help slow things down and give you the chance to think about whether you really want or need what you were planning to buy. Google ‘how to clear your cookies' to find out how to do this. 

  • You can remove shopping apps that you might be tempted to use from your phone.

  • You can also use free online tools (such as BlockSite) that let you temporarily block shopping sites for as long as you want. These might be useful if you know you sometimes spend more than you can control or feel comfortable about.

  • Keep your wallet out of easy reach. This makes impulsive spending more difficult. 

  • Your creditor can also help you in lots of ways. They might agree to temporarily freeze your card when you feel like your spending is getting out of control, change the amount of money you can take out of cash machines each day or switch off cash withdrawals altogether.

  • If you’re at risk of applying for credit and can't afford to do so, you can let potential lenders know that you don’t want them to lend to you. You can do this by adding a ‘note’ to your credit file. Reference agencies Experian and Equifax offer this service.

  • Think about getting rid of your credit cards if you find them too difficult to manage. You can get free, confidential debt advice if you're worried about how you'll pay your cards off.

  • Make a budget that shows all the money you have coming in and all the things you spend it on. Our Budget Planner tool only takes ten minutes to fill out and it analyses your results to help you take back control of your household spending. 

  •  When you’re feeling better, think about putting money aside for times when you might not be able to focus on saving. This might be in a savings account, a jam jar account or piggy banking. Find out more in our guide Managing your money using the jam jar approach.

Things you can do if you’re in debt and experiencing poor mental health

  • Ask a trusted person to look after your post. A trusted person might be a relative, a friend or a support worker.

  • Don’t ignore the companies and people you owe money to, because if you do, they may continue to chase you rather than giving you time to sort things out. See our Dealing with creditors section below for more information.

  • If you’ve bought something and then decide you can’t afford it or don’t want it; you can cancel or return items and get your money back. Find out more in our guide Consumer rights – what you need to know.

Where can you get free debt help?

If you've had poor mental health for some time, you might find yourself in financial hardship. This could mean you don't have enough money to pay for the basics such as food, gas and electricity, Council Tax, rent or mortgage. It might also mean that you can’t pay back loans, credit card bills or overdrafts. 

There are many places where you can get free, independent and confidential help and information.  A debt adviser will talk you through your money worries and find ways to manage your debts. They can suggest solutions even if you don't think you have any spare money to deal with your debts. 

Dealing with creditors

A creditor is any organisation you owe money to, such as your bank, mortgage lender, credit card provider, landlord, local authority, energy, water, phone or broadband provider.

Many people are worried about talking to their creditors about their poor mental wellbeing. 

But it's a good idea to tell them, because once they know, they’ll be better able to provide you with support.

Ask if they have a specialist team or what else they can do to help customers in your position. Most companies will let you contact them in the way that best suits you – webchat, email, telephone or even in person.

Consider asking your bank to add a note about your mental health to their files. This may help alert them to signs of any unusual spending that you might carry out when you’re feeling unwell. However, it might slow down any application you make to your lender for credit in the future.

MoneySavingExpert has a downloadable booklet that takes you step by step through the pros and cons of telling your creditors. 

You can also add information about any mental health condition to your credit files in a 'notice of correction'. This can be added or removed whenever you want and will leave no ‘footprint’ of any kind.

You could ask your creditor to send a Debt and Mental Health Evidence Form to your GP or other health professional, so that they can find out more about how your mental health is affecting the way you manage your money and take this into account. Not all creditors will want to see written evidence of a mental health problem, but if they do, this form will be useful.

Breathing Space (also called The Debt Respite Scheme) gives someone in problem debt the right to legal protection from their creditors. You can find out more about Breathing Space and the Mental Health Crisis Breathing Space in the section below and on the Mental Health & Money Advice websiteOpens in a new window

Breathing Space

If you know you’re going to have problems with repaying what you owe to banks, loan companies, credit card providers or other financial services firms, you can ask a debt adviser to apply for you to join the Debt Respite Scheme (Breathing Space). There are two versions of the scheme:

  1. Standard breathing space This is available to anyone with problem debt. By law, it stops a creditor from taking action to get you to repay your debt for up to 60 days. Also, most interest and charges will be frozen.

  2. Mental health crisis breathing space This is only available to someone who is receiving ‘mental health crisis treatment’. This term has a very specific meaning and doesn’t cover everyone who is having therapy or taking medication for their mental health condition. However, this breathing space has stronger protections for people in debt. It lasts as long as the person's mental health crisis treatment does, plus a further 30 days, no matter how long the treatment lasts. You will have to ask an ‘approved mental health professional’ to make an application for a breathing space if you want to access it this way.

What to do if you think you’ve been unfairly treated by a financial services firm

If you feel you've been mistreated by your bank, building society or other lender after telling them about your poor mental wellbeing, you should first give them an opportunity to put things right. 

The simplest way to do this is to speak to a supervisor or a manager. If that doesn't sort things out, you can make a complaint.

Poor mental wellbeing can make it very hard to start a formal complaint, so you could ask a trusted friend, relative, or support worker to help you instead.

If you cannot resolve the issue with the lender and feel you need to take your complaint further, you can contact the Financial Ombudsman Service. Or to find out how to complain visit the Citizens Advice website.

Managing your money if you’re in hospital

If you experience a mental health crisis, are a risk to your own safety or need intensive support, a doctor may either recommend you be admitted to a hospital or decide you would benefit from being treated there. 

Managing your benefits

If you’re getting benefits and are in hospital for a while (usually longer than 28 days) some of them may stop until you return home and so you’ll need to let DWP, HMRC or your local council know about your hospital stay.  

If someone gets Carer’s Allowance for you, their benefit will stop at the same time. 

If you have a partner or spouse leaving with you and they are getting income-related benefits, such as Universal Credit, their benefit might change as well.

This guide from the Mental Health & Money Service explains what will happen to your benefits from the very first day you go into hospital.

This guide from Turn2Us explains more about the benefits you can get in hospital and the effects on carers, partners and spouses.

Managing your household bills

You’ll need to continue paying your bills. If you’re able to, think about setting up a direct debit so this will be done automatically. If managing your money when you’re going to be in hospital is likely to be a concern for you, you might be able to get someone to do this for you. 

See our section below on How to help someone else manage their money

Benefits if you have poor mental health

If you have a mental health condition, you might be entitled to help with benefits.

If you're over 16 and under State Pension age and have a mental health condition, you might be entitled to Personal Independence Payment (PIP) if you need help with everyday tasks. Even if you have a regular income, savings or both, you could still be eligible for PIP. For more information, read the PIP mental health guide on the Mental Health & Money Advice website. 

If you’re over state pension age you might be able to claim Attendance Allowance

If you can't work for an extended length of time because of your illness and you're not entitled to Statutory Sick Pay (or it has run out), you might be able to claim Universal Credit or Employment and Support Allowance (ESA) to help replace lost income. 

But if you're claiming a sickness or disability benefit, you will typically need a medical assessment as part of the claim process.

How to help someone else manage their money

As a friend or family member, you will know more than most about the person you’re worried about. So, you should be able to spot changes in their behaviour that might be warning signals, sometimes before the person themselves is aware they’re unwell.

You might want to agree with them that they’ll let you know when they’re feeling unwell. You could make an action plan together. For example, you could look after their credit card or bill payments when they feel unwell or help them make a GP appointment. 

Some people will need someone to look after their money in the future. You might want to consider setting up a Lasting Power of Attorney if a friend or family member's mental health means they might lose the capacity to manage their own money.  

If they’re claiming benefits, you could also think about setting up an appointeeship to manage their benefits for them.

Mental Health & Money Advice Service

If you have any mental health and money worries please visit the Mental Health & Money Advice Service which aims to help you understand, manage & improve your mental health and money problems.

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MoneyHelper is the new, easy way to get clear, free, impartial help for all your money and pension choices. Whatever your circumstances or plans, move forward with MoneyHelper.

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