Fairer finances: our latest research on the interaction between our ethnicity, money and mental health

For many people living with a mental health problem, getting the best out of a financial services provider can be challenging enough, from navigating a sea of complex products to simply trying to get in touch with your bank or building society without exacerbating feelings of dread or anxiety. 

But there is no singular, universal experience of money and mental health problems. Our experience can be influenced by a wide range of factors, including our ethnicity. Best put by the lived-experience quote below, for those of us from minoritised ethnic groups living with a mental health problem, the elusive but nagging feeling that something isn’t quite right when dealing with your financial services provider can be another hurdle to overcome when trying to get the financial support you need, and can directly impact your financial outcomes.

In 2023, we began to explore these issues as part of our ‘Through the Lens’ series, looking at the experiences of money and mental health problems for people from minoritised ethnic groups. We gained some great insights, but we knew there was more to be said. That’s why we recently published our latest research ‘Fairer Finances: Improving financial services for people with mental health problems from minoritised ethnic groups’, exploring how financial services firms such as banks, building societies and credit unions can better support people with mental health problems from minoritised ethnic groups. 

As ever, our Research Community, a group of over 5000 people with lived experience of a mental health problem or caring for someone who does, has been central to our research. However, for this project, we wanted to go beyond the way we traditionally work with our Research Community by adopting a more participatory research approach. 

To do this, we collaborated with 22 experts by experience who all belong to minoritised ethnic groups and have personally experienced a mental health problem to develop the scope of this research, carry it out and help develop our policy recommendations. Part of this process involved bringing together these lived-experience experts and senior representatives from financial services firms, including banks, building societies, credit unions and insurers, to identify the barriers to financial inclusion that people from minoritised ethnic groups with mental health problems face, and develop practical solutions. We were able to draw on the insights gained from this event to help shape our policy recommendations in the final report.

Our research finds that among people with mental health problems, a staggering half of those from Asian or Asian British (52%), or Black, Black British, Caribbean or African (50%) ethnic groups felt that their ethnicity has negatively impacted on their experiences with financial services. Participants shared how being racially discriminated against (or worrying that was the case) for instance where they were refused credit, undermined trust and contributed to increased anxiety when dealing with financial services firms. 

Crucially, we found that it is not a person’s ethnicity or mental health condition that inherently places them at risk of financial exclusion, but systems that are designed without equity for these groups in mind, meaning there is scope for financial services to do much more for these customers. Our research participants shared the hugely detrimental impact this was having on their financial wellbeing — for example, by damaging their confidence in managing their finances, and making them feel less financially secure. They also shared the serious psychological impact, with more than half of those with mental health problems from minoritised ethnic groups reporting that poor experiences with financial services took a toll on their mental health.

Research participants said that their experience of using financial services had eroded their self esteem and emotional resilience, and made it harder to push for the extra support they need.

Through speaking with our Research Community, and representatives from financial services, we were able to identify three key gaps that we felt firms must address in order to provide comprehensive and equitable services for customers from minoritised ethnic groups with mental health problems:

The knowledge gap: Many firms simply do not collect the needed data to paint a clear picture of outcomes for customers with mental health problems, and particularly how these outcomes are impacted by ethnicity. This means that there is no way of assessing the success or gaps in new initiatives, or whether firms are effectively meeting their obligations under the Consumer Duty. 

We want to see firms do more to understand outcomes for customers with mental health problems, including routinely collecting ethnicity data using explicit consent, and clearly explaining to customers how this data will be used to improve outcomes. As a first step, firms can use existing customer data to infer customer outcomes for these groups. 

The trust gap: Symptoms of a mental health problem can in some cases make it harder to trust, and intergenerational experiences of systemic racism can make it particularly difficult for those in minoritised ethnic groups to trust institutions such as financial services. To address this, we want to see greater transparency among firms by informing customers of the reasons for decisions such as turning down a credit application. Furthermore, we want firms to provide better support in these cases, such as signposting customers to resources that can help them understand their credit score and how to improve it. These simple steps can go a long way in rebuilding trust between a provider and customer, and help people from these groups achieve better financial outcomes over time. 

The accessibility gap: For many people with a mental health problem, symptoms of their illness can make communicating with a financial services provider a daunting task. These barriers can feel even greater for someone also from a minoritised ethnic group. To combat this, we want to see firms offer a wide range of reasonable adjustments to meet the varying needs these customers may have. For example, by offering longer appointments for someone who speaks English as a second language and who may benefit from having things repeated or clarified.

The systemic and societal racial inequalities which lead to poorer financial outcomes for people from minoritised ethnic groups, particularly those with mental health problems, are deep, complex and varied. However, over the course of this research project, we’ve been encouraged by the willingness of financial services firms to get this issue right, and of our Research Community members to candidly share their experiences – a sure sign that there is scope for change within financial services.

You can read our full report and recommendations here. 

Missed our report launch event? You can watch it back here. Our Mental Health Accessible programme also provides consultancy support to practically equip firms to better support customers with mental health problems. You can find out more about Mental Health Accessible here.