Making financial inclusion deliver for people with mental health problems

Recently we published our paper Who’s in? to make the case for an ambitious Financial Inclusion Strategy that delivers for people with mental health problems. 

Our Chief Executive Helen Undy is a member of the Financial Inclusion Committee. The Committee consists of representatives of the financial services industry, government bodies, consumer groups and charities, exploring ways to boost financial inclusion in the UK across six key areas: 

• Digital inclusion and access to banking services
• Affordable credit
• Insurance
• Problem debt
• Financial education and capability
• Savings

Mental health is a cross-cutting theme of the Committee’s work, so it’s crucial that the experiences of people with mental health problems are considered throughout the Strategy. People with mental health problems are at greater risk of financial exclusion across all six areas of the Strategy. When you couple this with the fact that one in four people live with a mental health problem, it’s clear that a Financial Inclusion Strategy that fails to deliver for people with mental health problems won’t reach everyone it needs to. 

The Strategy brings a rare and exciting opportunity for much needed change; so we’re determined it’s as ambitious as possible. Below we will focus on the barriers to access and opportunities for change in three key areas: digital inclusion and access to banking services, insurance, and problem debt.

Online journeys can be challenging for people with mental health problems, who often have difficulties:

1) navigating sources of information (such as providers websites or call centre menus) 

2) understanding information from providers, especially when they are acutely unwell or when the information includes jargon or data that isn’t presented clearly.

Everyday banking tasks can also be a struggle as a result of common symptoms of mental health problems and for some people, online banking and card or contactless transactions make budgeting and managing their finances overwhelming when they’re unwell.

Many banks and building societies offer ways for a trusted friend or relative to support someone with their finances, but there is still a lack of suitable options to meet people’s needs – three in ten (30%) members of our Research Community think current third party access options are unsuitable for them.

We need to see inclusive design principles that are based on a strong understanding of the needs of customers with mental health problems applied across financial services. And we’d like to see tools like spending controls and carers cards available across the sector – to ensure that digital banking delivers good outcomes for customers with mental health problems.

Some forms of insurance (such as travel and protection products which have a health-based underwriting criteria) are less accessible, as disclosing a mental health condition will see premiums soar. 

Through a mystery shopping exercise testing 15 travel insurance providers, we found that a ‘customer’ with severe bipolar disorder was turned down by 9 providers. When cover was offered, the price quoted was up to 27 times higher than that quoted to a customer without mental health problems.

Being unable to afford insurance products or being excluded altogether is causing deep distress; with some people feeling discriminated against by insurers.

To address this, the FCA should review the travel insurance underwriting data for people with pre-existing mental health conditions, to improve risk assessment and outcomes.

Over 1.5 million people in England are experiencing both problem debt and mental health problems. 

Common symptoms of mental health problems such as memory problems and low self esteem can make it harder to navigate complex collection processes and can see people trapped in debt collection systems. 

Complex and inflexible systems, which can cause people to disengage or leave them feeling too panicked and strained to reach out and negotiate an affordable repayment plan, are compounded by additional charges and fees which make repayment even harder. Meanwhile, opportunities to aid recovery through joined up support are often missed.

To rectify this, shared standards should be mandated across all forms of debt collection, setting out the acceptable speed of escalation, use of accessible communication channels, and frequency of communication. 

And with debt advice increasingly integrated into Neighbourhood Health Centres, HM Treasury and the Department for Health and Social Care should review where inquiries about people’s finances could be built into care pathways, so that those who would benefit are identified and supported into debt advice, making to make the most of these new co-located services. Thanks for reading and click the link here to read the paper in full!