Government action on financial inclusion and mental health

Yesterday the government published their response to a report by the House of Lords Committee on Financial Exclusion. This report, published in March 2017, and the process of consultation that fed into it, provided a helpful opportunity to discuss issues around financial inclusion and mental health. Here at Money and Mental Health we made a written submission to the consultation, and our Chair, Martin Lewis OBE, and Director Polly Mackenzie gave evidence to the committee this time last year.

We were delighted that the Committee’s report and recommendations drew directly on our evidence about the ways in which experiencing a mental health problem can affect how able we are to manage our finances, and supported our calls for control options on bank accounts and credit cards; we have been waiting eagerly to see how the government would respond.

As mental health has risen up the political agenda over the last 12 months, it’s clear that there is a growing appetite, inside and outside government, to think about practical ways to support people living with mental health conditions – including looking at the links between financial inclusion and mental health. In their response to the Committee’s report, the government highlighted their aim to work with stakeholders across financial services, the advice sector and healthcare providers to ‘highlight the impact of financial services issues on the recovery and outcomes of people with mental health problems’.

Ongoing work with the team here at Money and Mental Health to end the practice of GPs charging for the Debt and Mental Health Evidence form was provided of one example of this work. As part of a working group including representatives of creditors and doctors, we hope to soon reach a solution where people experiencing mental health problems will no longer be asked to pay to provide evidence of their health condition to creditors.

The report also mentioned the TechSprint which we held in March 2017, in partnership with the Financial Conduct Authority, the body responsible for regulating financial services providers. Over the course of two days, we challenged over 100 participants from financial services providers, tech firms, and academic institutions to build new tools which could make managing money easier for people experiencing mental health problems. Many of the ideas put forward provided the sort of ‘control options’ we called for in our contributions to the Financial Exclusion Committee – like the ability to ask a buddy to check large purchases, or the ability to set aside money for essential bills when keeping track of spending and sticking to a budget is tricky.

Both the review of the Debt and Mental Health Evidence Form and the TechSprint are great examples of how policymakers can promote both financial inclusion and mental health. However, we hope that the government will keep the commitment made in this response to go further in its efforts to break the links between financial difficulty and mental health problems – and we look forward to supporting them in that endeavor. While people experiencing mental health problems are three times more likely to be in problem debt, there’s plenty to do.

One area where we would like to see the government doing more is ensuring that people accessing mental health services, who are also experiencing financial difficulty, are directed to appropriate advice services. One in four people with a mental health problem is also experiencing financial difficulties, and we know that without this practical support, people are are much less likely to get better.

In yesterday’s response, the government acknowledged the link between financial difficulty and mental health, and specifically mentioned its investment in IAPT, NHS England’s main talking therapies programme.

We would argue that, while investing in mental health services is essential, we also need to join the dots to ensure that people experiencing mental health problems can get the holistic support they need – including debt advice, where necessary, to promote both financial inclusion and mental health. Our proposals for a trial of debt advice in IAPT would be a very practical next step to ensure that people experiencing mental health problems are able to get the financial support they need.

Equally, while the TechSprint started excellent conversations about the ways in which financial services providers can support customers experiencing mental health problems, we’re a long way away from a finished job. While the event saw some fantastic prototypes developed, relatively few customers have access to these tools on a daily basis, despite Money and Mental Health research suggesting that many simple tools which could help are already technically feasible. We would hope that in the forthcoming Consumer Markets Green Paper the government will go further in supporting regulators to drive innovation and ensuring fair access to financial services for customers in vulnerable circumstances.

It’s fantastic to see the government recognising the issues around financial inclusion and mental health, but there’s a lot more to do to break the cycle. We look forward to continuing to work with the government, healthcare providers and firms going forwards to ensure that having a mental health problem doesn’t mean you’re more likely to be financially excluded.