Alexis Stevens, Senior Strategic Partnerships Officer, Money and Mental Health

How creditors can reduce the stress around debt problems

PLEASE NOTE: This blog contains information on the subject of suicide that some people may find distressing.

27 August 2021

The implications of problem debt on people’s lives can be severe, so the government’s new debt management vulnerability toolkit for public sector creditors is a welcome step in helping people with mental health problems in problem debt. Sadly, people in problem debt are three times as likely to have thought about suicide in the past year.

“My debts feel like a weight around my neck and I often think that financially my husband would be better off without me – leaving him or taking my own life.” – Research Community member

An important part of the puzzle

The toolkit is designed to help government departments improve how they identify and support vulnerable customers in debt, and the focus here is firmly on frontline staff. We know frontline staff are an important part of the puzzle – the toolkit contents, informed by organisations such as the Money Advice Trust – encourages listening skills and empathy, promotes increased understanding – and gives clear guidance on how to respond. If brought to life, the toolkit will help remove staff fear and enable supportive conversations – ultimately aiding a culture which empowers staff to do the right thing. But there is more to do – particularly in how we communicate with those in problem debt.

Financial problems can put pressure on a person’s mental health, particularly if they are treated insensitively by creditors, so arrears and collections processes must be designed to minimise distress and maximise help seeking behaviour. That might be things like changing the tone and content of a debt communication letter, or creating multiple channels where a customer can get support (not only on the phone). 

We know from our research that half of people in problem debt also have a mental health problem. Simply put, debt communications must be a priority.

What it’s like if a service gets it right

While the toolkit is a welcome first step towards improving the way public sector creditors treat people with debt problems, this issue should also be a top priority for essential services firms. We know from working with essential services providers on debt communications through our Mental Health Accessible programme, that making any changes to better support customers with mental health problems can make a huge difference to a customer’s experience. 

Just today I was reminded of what it’s like if a service gets it right, when we received some feedback about debt communications from a member of our research community.

“Recently had a letter asking if I was ok, and they were saying sorry for not being in touch sooner and if I was struggling to pay my agreed amount to them it would be reduced with no strings attached. So instead of me saying sorry, they were offering help. Finest letter I have opened.” – Research Community member

This example highlights how big an impact businesses can have when they take care over the way they reach out to customers with mental health problems. Not only can it make a huge difference in helping people continue to engage with their account, it can also go a long way in reducing the psychological distress that communications around debt can cause.

Now we want to work with more firms across all essential services sectors to help them improve the way they communicate to people in problem debt. If you would like to find out more about how we could work with your firm to improve your debt communications through our Mental Health Accessible programme, please get in touch: [email protected]