Nikki Bond, Interim Head of Research and Policy, Money and Mental Health

Bridging the gap: The untapped potential of Mental Health Crisis Breathing Space

31 January 2024

  • The number of people behind on payments is still at its peak during the cost of living crisis.
  • The Breathing Space debt respite scheme was introduced in 2021 – it provides people with legal protections from action from their creditors for 60 days, and has already been used by over 200,000 people.
  • The Mental Health Crisis Breathing Space scheme, however, is clearly underutilised despite the strong link between being in a mental health crisis and experiencing financial harm.
  • We want to see changes to how Mental Health Crisis Breathing Space works to help it reach its full potential.

When it feels like you’re drowning in debt, respite from contact from your creditors can be a lifeline – providing time and space to seek help and think clearly about how to tackle your debts. Breathing Space, which provides people with legal protections from creditor action for up to 60 days, was introduced in 2021. Since then, there have been over 200,000 individual Breathing Space registrations helping hundreds of thousands of people seek respite and relief from the crushing weight of their debts.

The number of Breathing Space applications have risen by 25% from 70,772 in 2022 to 88,390 in 2023. This is perhaps not surprising, given one in ten UK adults reported being behind on consumer credit payments (such as credit cards or loans) in the three months leading up to October 2023 – and the number of people behind on key payments, such as energy, housing or council tax, at the highest levels they’ve been during the cost of living crisis.

What is surprising however – given the higher rates of problem debt among people with mental health problems and the acute financial harm experienced by those in crisis – is that so few of these Breathing Space applications have been for the Mental Health Crisis Breathing Space (MHCBS) mechanism.

Overwhelming need for Mental Health Crisis Breathing Space

People with mental health problems are nearly three times as likely to be in arrears across all household bills compared to people without mental health problems (11% compared to 4%). These financial challenges, and the ensuing contact from creditors, can be particularly devastating for people experiencing a mental health crisis and who require support from community or inpatient mental health services. 

Our Not a secondary issue report found that more than eight in ten (86%) research respondents experienced financial harm while under secondary mental health care, such as an inpatient stay or crisis care in the community. More than half (55%) reported that they missed a payment for an essential bill such as a mortgage, rent, energy or council tax while receiving mental health treatment and support.

“I was never asked if there was anyone who was opening mail and keeping on top of my day-to-day living stuff… It’s always the same. I go in for treatment and come out to find my financial world is in a bigger mess than when I went in. The resultant terror, shame and guilt undoes all the work of the treatment and I am back in crisis again.” Expert by experience

Woefully underutilised

Mental Health Crisis Breathing Space was introduced to allow people in mental health crisis to access respite from their debts when they were too unwell to access relief through the standard Breathing Space route of a debt advisor. However, the current utilisation of MHCBS is significantly below its potential or the numbers forecast by HM Treasury, which estimated that 27,000 people would enter Mental Health Crisis Breathing Space in 2021-22, rising to 54,000 by 2030-31.

The service is falling significantly short of reaching this number, with just 3,302 entrances in the first 32 months of the scheme, representing just 1.6% of all Breathing Space registrations. Despite the evident need, the way in which the service is designed and delivered means that it is woefully underutilised.

What needs to change?

To address this disparity and ensure all those in crisis get the support with their debts that they need, we make three key recommendations:

HM Treasury should expand the range of professionals authorised to sign off on mental health crisis. Only a narrow range of professionals can attest to a person being in mental health crisis, which limits the number of people in crisis who could benefit from the scheme. Expanding the range of professionals authorised to sign off on mental health crisis would help to ensure access for a larger group of individuals in need.

The Money and Pensions Service should, as part of their responsibility to raise awareness of debt advice among those who could benefit from it, commit to a program of work to raise awareness of MHCBS to a wider group of professionals supporting people in crisis.

The Department of Health and Social Care and NHS England should automatically offer Mental Health Breathing Space to individuals detained in hospital. Based on detention figures from 2020-21, focusing on longer-term admissions would support around 11,000 more people and go some way to address the financial impact of extended stays.

Unlocking greater support for people in crisis

The Mental Health Crisis Breathing Space holds huge potential to support people in crisis, offering much-needed relief from debt collection activity and the opportunity to focus on mental health recovery. 

For the scheme to reach its potential, urgent and decisive action is required now.