A transatlantic perspective on money and mental health problems

We spend a lot of time at Money and Mental Health knee-deep in the detail of technical policy proposals, so it was a pleasure last night to be able to take a step back and a broader look at the system itself in our talk on US and UK approaches to money and mental health problems, hosted by Capital One.

We were fortunate to be joined by Dr Annie Harper of Yale University, who presented her research on how people with serious mental health problems cope with poverty and financial difficulties, with a particular focus on how the US financial services and retail industries could help. Three key differences immediately stood out compared to the UK system: the lack of free debt advice, the size and breadth of the prepaid card market, and the constant financial threat presented by a lack of affordable healthcare. Our panelists Tom Blomfield, CEO of Monzo, and Janine Hirt, COO of Innovate Finance, reflected on Annie’s research and what the UK fintech sector could learn.

The discussion was a welcome reminder of how lucky we are to have a well developed and reliably funded debt advice sector in the UK. The sector has to work hard and innovate to meet demand, but the levy on the financial services industry to pay for this advice is a real game changer when comparing life in debt in the UK and America. Annie reflected on how mental health professionals are trying to step in to provide money advice to their service users in the States, something that has also been highlighted in our research on the UK – although more as a result of inaccessible services than a total lack of provision.

For people who either don’t have the credit file to open a current account, or who want to limit their exposure to the fees and charges that this can bring, prepaid cards are the main option in the States as there is no requirement to provide ‘basic’ bank accounts. Annie highlighted the very low proportion of the ‘unbanked’ population in America who opened current accounts when the law changed to state that benefits must be paid electronically, with most opting instead to have them paid onto prepaid cards. While it’s helpful that these products exist for those who want them, the panel discussed the challenges of high usage fees, and a lack of access to either good customer support or credit for those who need it. Tom Blomfield highlighted the false distinction between current accounts and prepaid cards, which rests on an assumption that current accounts have overdrafts, and that prepaid cards carry fees and come with poor customer support.

Looming over all of this discussion though was the very different context in the US and UK when it comes to healthcare. Discussions about money and mental health in the UK often move onto access to credit, and whether self-excluding from credit is helpful for those who struggle to control spending. But in the States, where access to credit may be the only way to foot unexpected medical bills, this ceases to be an option for most.

The ‘health’ of your credit score then has even greater implications as it may dictate your access to health services, as well as being shared with future employers or landlords, affecting your potential for earning and securing decent housing. Perhaps partly as a result, the fintech solutions discussed in the States seem to focus much more on third party support – on cards that allow a third party to help set spending limits or approve particular types of transaction, or that allow ‘view only’ permissions for a third-party on accounts. Although no replacement for controls customers use themselves, we’d like to see options for third-party help with financial management more widely available in the UK. Tom revealed that Monzo is currently developing the option for these third party controls and we hope to see other banks following suit.

Above all, the discussion was a helpful reminder that many of the difficulties we face navigating financial systems when we’re struggling with our mental health are because of problems with those systems – not problems with people. It doesn’t have to be the case that current accounts have overdrafts, that managing our money is something we do by default our own, or that wanting more control also means fewer possibilities when it comes to things like credit. Fixing those systems will not only help people with mental health problems, it will make them work better for everyone.