Rachel Fergusson, External Affairs Assistant, Money and Mental Health Policy Institute

Cost of living crisis: what’s the mental health impact?

8 June 2022

Over the last six months, we’ve been surveying members of our Research Community – a group of over 4000 people with lived experience of mental health problems – to find out how the cost of living crisis is affecting their mental health and finances. Today we’ve published a new report sharing some of those experiences, and highlighting the devastating impact of the crisis on people with mental health problems.

Our findings showed that people with mental health problems are nearly twice as likely as those without to say they have felt unable to cope due to the rising cost of living. Many of our members told us how they’ve been forced to make significant changes to their day-to-day lives, such as cutting back on energy use and other essentials. And it isn’t just people’s finances taking the hit either. Lots of people shared the direct and gruelling impact the crisis is having on their mental health too.

The impact of rising costs

In January, we explored the impact of rising energy costs through a survey of almost 300 members of our Research Community. The majority of respondents told us they had made adjustments to their way of living in response to the energy crisis – with 81% saying they had cut back on energy use. One of our Research Community members explained:

“For us, this really could be the straw that breaks the camel’s back. Never before in my life have I had to choose between having warmth and being able to put food on the table. Now that is very much a reality… Finances have always been tough, but nothing like they are now.”

Come May – with inflation picking up pace and the rise in the energy price cap coming into force – the hit to people’s finances was being widely felt. A second survey of our Research Community found 46% had reduced the number of meals they ate per day, and one in five (20%) had missed a payment for a bill.

Mental health: the hidden cost

Many of our Research Community members described how these cutbacks and uncertainty around their finances are having a serious impact on their mental health:

“I can’t sleep at night for worrying, I keep crying and wonder how I’ll manage to keep going. I’m staying in bed a lot more, even though I’m not sleeping, as I’m scared to go out and spend money, and scared to heat the flat when it’s cold.”

“Unrelenting stress of worry and having to do without etc. Makes managing mental health impossible as it’s a constant barrage of problems and concerns and everything just gets worse by the day. It has led to me having suicidal ideation.”

Others shared how financial constraints are directly affecting the treatment they receive for their mental health. Nearly one in five (19%) respondents said they had missed an appointment related to their mental health care, with some explaining that they simply cannot afford the cost of travelling there:

“I have had to miss mental health care appointments, renege on CBT and counselling appointments and worst of all hospital appointments for physical health. I was booked in for physiotherapy but simply can not afford to get there.”

What more can the government, firms and regulators do?

At the end of last month, the government committed to further support targeted at those on the lowest incomes. These measures were welcome, but this crisis isn’t ending anytime soon and the needs of many are still acute.

We’re calling on the government to make the Universal Credit system and other support measures more accessible. That means simplifying the process allowing people to get help from a friend or family member to manage their benefits. It also means making the link between poor mental health and financial difficulty a key concern in its new suicide prevention strategy, due to be published later this year.

There is also a vital role for essential services firms and regulators. Firms should be actively promoting social tariffs, and making sure the process of disclosing a mental health problem is clear and straightforward. We’re also asking firms to reduce the distress caused by letters, email and phone calls to people in debt, by making sure they are as supportive as possible. And regulators should be holding firms accountable on these steps – and issue harsh penalties on companies failing to treat vulnerable customers fairly. 

It’s clear from the experiences of our Research Community that action to support people with mental health problems can’t end with the government’s most recent announcements. Issues around accessibility, disclosure and customer support are crucial if people with mental health problems are to get the help they need to get through this crisis, and beyond. 


You can read our research and recommendations in full here.


If you’re struggling with your mental health and finances as a result of the cost of living, you can find a list of organisations where you can get help here.