Never just a number: the value of debt advice

Mental health and debt problems are interwoven: often one can be the cause of the other. The pressure of debt can exacerbate mental health problems, and external help and support can be needed for an individual’s situation to improve, especially when their circumstances are complex.

Christians Against Poverty (CAP) is a national debt counselling charity helping people out of debt and poverty across the UK. Earlier this month, we launched Never just a number, a report written by the London School of Economics (LSE) Housing and Communities research team, looking at the charity’s social return on investment. The social value analysis used qualitative and quantitative data, drawing on over 12,000 client records and 120 in-depth interviews with stakeholders, managers, volunteers and clients.

The headline figures showed that for every £1 spent on poverty relief by CAP, there is £3.60 worth of benefits to society, and the total social return on CAP’s investment exceeds £31.5 million.

In particular, the report shows that one of the greatest social benefits offered by the charity is the improved mental health of those we work with. It found that a quarter (26%) of CAP clients self-report a mental health problem, but it was estimated by those that work on the frontline that in reality up to two thirds of clients struggle with poor mental health.

Our home visiting service means that people in this position can receive help from the comfort of their homes. CAP will stay with the client until they go debt free, negotiating with creditors on the client’s behalf and updating payment plans upon changes in circumstance.

By doing this, we can help to take the burden of debt off an individual. Clients describe it as a weight lifting off their shoulders. What’s more, LSE identified that because CAP works through local churches, they are able to go the extra mile, which may include a food shop for people with empty cupboards, helping to source furniture for those going without, or redecorating homes.

One example is CAP client Eric, who began to struggle with his mental health after the death of his wife. She had always been in charge of the household finances, so after her death it gradually grew out of control. With all this going on, he struggled to stay in work and the statutory sick pay was not enough to live off, so his debts continued to grow.

By the time Eric sought CAP’s help, his debts had amounted to £32,000. The stress of his debts made him suicidal. With CAP’s help he was about to go debt free and the relief of this financial stress saw his mental health improve: he was able to come off his medication and find work.

Finding relief from debt not only helps the individual’s financial situation, but also benefits numerous other areas, including relationships, confidence, money management, employment and mental health. The Never just a number report found that the relief of anxiety and depression benefited society by over £10 million. Of the £31.5 million given back to society by the organisation, improved mental health attributed to one third (34%) of the figure.

Once Eric went debt free, not only did society benefit from his improved health and employment status but he was able to give back. Eric now volunteers each week for CAP as a befriender, and is able to share his experience with clients and encourage them in their journey out of debt.

Although the majority of people that CAP helps experience successful outcomes, some clients do not pursue a debt resolution with the organisation. In some instances, mental health problems prevented individuals from receiving or pursuing the help they need. Interestingly, however, the success rate was higher for clients who suffered from mental ill-health in comparison to all clients. Indeed, LSE noted that CAP’s success rate was particularly high considering our clients’ level of vulnerability. Given the link that so often exists between financial difficulty and mental ill-health, it is all the more important to consider these challenges when looking at a debt resolution.

LSE also observed that all CAP clients received a level of care, help and support, which in turn helped to relieve stress or provide more clarity on the situation. It is not possible to know how clients fare after leaving CAP, but a large majority decided they were now able to manage their own debts, which in itself is a positive outcome.

Although the numbers are impressive, it is important to remember that behind each statistic is an individual, where each circumstance is unique and every outcome different. Although debt advice reaps huge benefits to society, the true triumph comes from each individual’s story of success – people like Eric, whose lives have been radically turned around thanks to the help and support they received.