Making mental health a strategic priority
The Single Financial Guidance Body
Consumers with mental health problems need to get more, and better, support from the money advice and guidance sector: that was my strong message to the government this week, when Money and Mental Health responded to the Treasury consultation on financial guidance.
The basic plan is to merge the Money Advice Service (MAS) – which funds debt advice as well as more general money advice – with The Pensions Advisory Service and PensionWise. They’ll become a single body, provisionally called SFGB, or the Single Financial Guidance Body. I’m guessing they’ll come up with something a bit catchier before the launch.
The SFGB explained
The consultation, which closed on Monday, is on the detailed plans for “SFGB”. Who will it help, and how will it do so?
I believe it’s essential that the new body makes helping consumers with mental health problems a strategic priority. That’s something MAS has never done, even though having a mental health problem means you’re three times more likely to experience problem debt, and living through a financial crisis makes you eight times more likely to think about suicide.
Consumers with mental health problems, who make up a quarter of the population, have specific needs with regards to financial guidance, and particular difficulty finding and obtaining that guidance. During periods of poor mental health, cognitive and psychological changes can have a significant impact on financial capability – poor mental health is linked to:
- Higher spending during periods of poor mental health.
- Disengagement from your finances, like not answering the phone or opening bills.
- Impaired cognitive functioning, like difficulties concentrating or memory problems.
These changes also affect the ability of consumers to communicate successfully with financial services providers and access financial guidance, information and advice. The difficulty accessing guidance can worsen financial problems. The new body needs to make sure information is easy to access for the people who really need it – not just for the “average” consumer.
The need for flexible support
The new guidance body will also play a role in supporting financial education. In doing so, it must be more ambitious, and not limit that education to teaching people maths – however valuable maths may be! Our research has shown that many people, including those who are normally good with money, can cause themselves serious financial self-harm during periods of poor mental health. It is vital that financial education efforts incorporate support for young people in understanding their emotional relationship with money and financial decision-making.
Financial capability is not static, and can reduce as well as improve over time, sometimes dramatically and substantially. Financial capability or debt advice ‘interventions’ shouldn’t, therefore be one-off events in a consumer’s life, when they can be “fixed”. Some consumers may need lifelong support, while others will return to advice or guidance repeatedly. The new body should work to ensure that guidance and advice are available and easy to access at all the moments when they may be needed – and particularly by those who might need it most.