Polly Mackenzie, Director, Money and Mental Health

Breathing space

“Breathing Space” for those in debt would boost mental health


Being in debt isn’t just a financial burden, it’s an emotional one, too. When your finances get on top of you, creditors may come knocking at your door, they may phone you at all hours of the day, and with interest and charges mounting up, it can feel like you’re out of control. A financial crisis is one of the most stressful situations you can be in – and anyone with a pre-existing mental health problem is at particular risk.

That’s why Money and Mental Health is backing calls for a new law to introduce compulsory ‘breathing space’ for those in problem debt.


The proposal
Anyone seeking professional debt advice and engaging with a plan to work through their financial problems would get a break of up to a year from new fees and charges on their debts. Instead of a race against the clock to sort out your problems before the interest charges make them insurmountable, people would know they could take the time to get it right, and fix their finances properly.


What’s it got to do with mental health?
The biggest advantage from our perspective of this ‘breathing space’ would be emotional. About half of those with problem debts have a mental health problem, and in the vast majority of cases, the financial stress makes that mental health problem worse.

As a result, people with debt and mental health problems find themselves juggling, trying to fix both at the same time and discovering it’s almost impossible. If you can’t get on top of your mental health, it’s hard to work to earn money to pay your debts. But if you can’t get on top of your debts, you’re trapped in a stressful situation that worsens your mental health.

A breathing space of up to a year would give people the chance to spend real time focusing on their mental health recovery, safe in the knowledge that their financial problems aren’t spiralling further out of control.


What’s in it for the lenders?
In the end, this kind of pause would be good for the creditors too. Because once someone has recovered from a period of poor mental health, they’re far more likely to be able to work. That means they’ll be more likely to be able to pay off their debts. A mental health crisis, hospitalisation, or long term unemployment aren’t good for anyone.

Many creditors offer this kind of break already, particularly for those who can provide evidence of their mental health problem. Real progress has been made in recent years to improve practice. But only a statutory scheme, guaranteed in law, would protect everyone at risk of a debt and mental health crisis.


Next month, Conservative MP Kelly Tolhurst will be proposing a new law to introduce this ‘breathing space’, and she has our support. Do send us your thoughts, and ideas in advance of the debate in Parliament, and we’ll include them in our briefing for MPs.