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

5 ways to protect people’s financial and mental wellbeing in the cost of living crisis

21 April 2022

The last few weeks have been difficult – to say the least – for the large proportion of the population worried about how their finances will fare through the cost of living crisis. Looming rises in energy costs and council tax bills finally arrived. And with the chancellor’s failure to offer any meaningful measures to support people struggling in his Spring Statement, many people have been left asking the very real question of how they’re going to get through the months ahead.

Given what we know about the deep links between mental health and financial difficulty, the mental health implications of the crisis are set to be huge. It is first and foremost the government’s responsibility to protect those on the lowest incomes from the worst effects of the cost of living crisis. But at the same time, there are a number of other actions that firms, local councils, regulators and health practitioners can take to mitigate some of the psychological harm people are experiencing as a result of the crisis. Below, we’ve put together five ideas for how these different actors can help to ensure the cost of living crisis doesn’t become a mental health crisis too.

The government should increase benefits and sick pay, and make them easier to access for people who are struggling.

The rate at which benefits are rising should be accelerated, to avoid prices running beyond the level of benefits. The DWP should also step up action to make the benefits system more accessible for people with mental health problems, such as making it easier for people to get support from loved ones to manage their benefits – as we’ve called for our in our Set Up To Fail’ campaign

Firms and public authorities should stop aggressive debt communications.

Essential services providers like energy companies and banks  should review their communications around debt to ensure they are focused on support, and offer clear signposting on how to get help (you can read more about our specific tips for energy firms here). They should keep the frequency of collections calls to a minimum and contact customers through the communication channel they find easiest to access. The government, councils and businesses should also cut down on the use of bailiffs and crack down on bad bailiff behaviour. 

Firms should improve disclosure processes and provide reasonable adjustments for people with mental health problems.

Energy companies and banks should be proactive about offering support and encourage customers to disclose. They should focus on the practical needs of customers who need help and offer reasonable adjustments to people with mental health problems as required under the Equality Act 2010. This could include offering payment reminders and flexible third party support options. Regulators have a responsibility to make sure firms are offering reasonable adjustments and support to vulnerable customers, and hold those not complying to account. 

Health and social care professionals should routinely ask about financial worries and signpost money help when working with people with mental health problems.  

The government and NHS England should ensure that prompts about financial difficulties are included in Care and Treatment plans, health checks and other support measures for people with mental health problems. 

The government should prioritise tackling the link between financial difficulty and mental health problems in its pandemic recovery plans.

Addressing this link should be at the heart of cross-government plans on tackling health inequalities, to give people a better chance of recovering from both mental health problems and financial difficulties. 

These actions alone won’t solve the cost of living crisis, but they could go a long way in reducing some of its impact on the mental health and finances of people who are struggling. We’re urging government, essential services firms, regulators, councils and health services to act now, to stop it tipping over into a mental health one too.

If you are struggling with your mental health or finances, please visit the ‘get help’ page on our website, where you can find information about support. 

If you are anxious about your finances and are wondering what to do now, you can also read this guide by Martin Lewis, which contains lots of useful tips and advice.