Becca Stacey, Senior Research Officer, Money and Mental Health Policy Institute

How money and mental health problems affect us at different stages of life

15 December 2022

For many of us, the expectation is that as we get older, we’ll be financially secure. We hope that our progression through adulthood will see our careers develop and earnings increase, enabling us to build up savings and potentially purchase our own home. 

But the reality can be different for many people with mental health problems, and for whom getting older does not guarantee the same level of financial security as it can for peers without these conditions.  

Our latest policy note, published today, looks at how money and mental health problems affect people at different stages of their lives. Here are some of the key findings:

People with mental health problems start off in adulthood at a financial disadvantage

When considering why people with mental health problems struggle to achieve the same level of financial security with age, it’s important to start by looking at peoples experiences in early adulthood. 

Younger people (aged 18-34) with mental health problems are significantly more likely to be financially anxious (63%) than their peers without mental health problems (41%). Debt is one of the key drivers behind this. Only 31% of 18-34 year olds have no debts (this figure excludes student loans and mortgages), compared to 47% of this age group without mental health problems. 

Members of our Research Community – a network of 5,000 people with lived experience of having a mental health problem – told us how challenging it can be when you’re young and struggling to manage your mental health problem and the impact it can have on your finances. Combine this with becoming an adult and suddenly having access to large amounts of credit for the first time, and the result can be detrimental.  

I got into debt when I was younger, I was less good at managing my finances around my mental health. I have developed better systems as I have got older.” Expert by experience

Many people with mental health problems spend a significant proportion of their adult life burdened by and struggling to pay off the debts they got into while younger.

Growing old does not reduce the financial gap between those with and without mental health problems

Not only do those of us with mental health problems struggle more financially when younger, but there are also factors that mean we fail to catch up with our peers — and therefore are less likely to experience the same levels of financial security in later life.

For example, people with mental health problems are less likely to earn as much, progress in work or stay in employment for as long as those without mental health problems. This, combined with the inadequacy of our social security net, means those of us with mental health problems often struggle to save throughout our working life to the same extent as those without such conditions.

I worry at times that I have no money saved for my later life. I would have liked to have had a good pension, but due to my mental health’s effect on my employment I am not able to have one. Mental health has ruined a huge part of my life, and I take medications daily for it. I feel like I am getting better in some ways and can achieve more, but I cannot improve my financial situation especially at nearly 57 years old.” Expert by experience

The presumption that getting older equals financial security therefore doesn’t always hold true for people with mental health problems. In fact, 55-65 year olds with mental health problems are over twice as likely to be financially anxious (44%) as those without mental health problems who are this age (20%). And interestingly, the level of financial anxiety they experience is comparable to those without mental health problems aged 18-34 (41%).

The need for more targeted interventions

Looking at the relationship between our money and mental health from an age perspective, adds necessary nuance to the assumption that older people experience financial security. And by improving our understanding of how peoples experiences vary, we can deliver more effective solutions. Policymakers, employers, essential service providers and those working within mental health services all have a role to play in delivering targeted interventions that address the barriers to good financial health that people with mental health problems of different ages face. 

We want the government and employers to address the fact that people with mental health problems are more likely to fall out of work at an earlier age. We also want the NHS to address the links between people’s mental and financial health from their first mental health diagnosis. And essential services firms must make it easier for people of all ages to disclose a mental health problem.

Read more about our new research here.