New ONS data: The mental health impact of the cost of living crisis

Today, the Office for National Statistics (ONS) released new data about how financial pressures are impacting people’s wellbeing. The data presents a picture of worsening finances taking a huge toll on the nation’s mental health. 

These financial pressures are affecting millions of people, some of whom may never have experienced financial problems or difficulties with their mental health before. This marks a huge opportunity for the government to act quickly to prevent these dual challenges before they become entrenched.

The ONS data shows that half of adults who were behind on energy bills reported high levels of anxiety, compared with a third of those who were not behind. Fuel costs were the number one reason people were seeking help from Citizens Advice across the country.

Some people, struggling to meet rising costs, may be plugging the gap in household budgets with increased borrowing. The data found that more than two in ten adults said they’d borrowed more money or used more credit in the last month. One in five of those who’d increased their borrowing reported lower happiness.

While the ONS has specifically focused on financial difficulties arising from the current cost of living crisis, unfortunately, the toxic link between money and mental health is nothing new. Our work, and that of many other charities, evidences how the relationship between financial difficulties and worsening mental health is long-standing and extends beyond the current crisis. 

Our analysis of the 2014 Adult Psychiatric Morbidity Survey found that half of people in problem debt also had a mental health problem. In 2016 our research, Money on your mind, found that almost nine in ten respondents to a survey of nearly 5,500 people with experience of mental health problems said their financial situation had made their mental health problems worse.

The mental health consequences of financial difficulties are clear, and for some, those consequences can be devastating. Our 2019 report, A silent killer, found that people in problem debt were three times as likely to have thought about suicide in the past year. In 2021, our The state we’re in report found a link between higher debt levels and suicide – with almost six in ten people with debts of more than £30,000 having experienced suicidal thoughts or attempted to take their own life.

The pandemic and the cost of living crisis provide yet more evidence of the mental health effects of living in financial difficulty. Yet, while the current press attention exposing the pressure families are under is welcome and long-overdue, this must now be met with tangible and urgent political action. It’s vital that the government intervenes and delivers policy solutions that address the combined challenges of financial difficulties and mental health problems. 

Tackling this challenge requires both long-term and immediate changes. Structural changes include efforts within the Department for Work and Pensions to support people to secure, retain and progress in good quality work tailored to people’s individual needs. And designing a benefits assessment process that is fit for purpose.

We acknowledge that these structural changes take time. Fortunately, there are smaller practical steps the government can take to make a real difference sooner, including: 

• Urgently postponing the increase in the Energy Price Guarantee set to occur on April 1 2023
• Asking the Financial Conduct Authority to explore how to reduce the damaging pressure customers feel who have fallen behind on payments – by considering the  introduction of new limits on the number of times creditors can contact people in debt within a given window
• Publishing the updated 10-year suicide prevention strategy, with an emphasis on actions to break the links between financial difficulty and suicidality.

As the cost of living crisis surges on, its toll on the nation’s mental health becomes more apparent. It remains clear that some particularly vulnerable groups, including those with mental health problems, are feeling the effects more acutely. 

If we are to avoid the cost of living crisis becoming a profound crisis for already overstretched mental health services, action is required now.