When the small steps feel impossible: money, stress and mental health

Wednesday 4 November is National Stress Awareness Day. This year it falls in the middle of Talk Money Week, when the Money and Pensions Service is encouraging small, manageable steps, like speaking to a lender early or checking which benefits you could claim.

Those steps are important; but anyone who has struggled with their mental health will know that even opening a letter or making a phone call can feel impossible when you’re unwell. To mark the day, we asked our Research Community about what money stress is really like and what would make it easier. 

For most of the members we heard from, money stress isn’t an occasional worry that flares up when a big bill lands. Nearly half had felt it all or most of the time over the past year, and six in ten said it was worse than this time last year. 

For many of our members these pressure comes from running out of money for food or heating, or even essential bills. Many have had to use credit cards, loans, or go into their overdrafts just to meet their basic needs. These problems pile up, for members facing more than three financial pressures, 76% felt stressed all or most of the time.

We know that money problems and mental health problems reinforce one another resulting in a vicious cycle, but in this most recent survey 92% of our members told us that when money issues came up, their mental health got worse. Many also lost sleep, struggled to concentrate or felt physically unwell. 

This has run-on consequences for dealing with the money problem itself. Nearly two-thirds of Community members avoided opening letters or emails, or answering the phone, and over half put off dealing with bills or debt.

Whilst to a creditor, this might look like someone ignoring their debts, in reality it’s a sign of how unwell the person they’re trying to contact is. And it tends to happen just when people most need to get in touch.

If avoidance is a response to stress, then piling on more pressure is likely to backfire. Yet members told us that is often what happens. A stream of letters, calls and texts, demands to repay large amounts quickly, and forms or phone calls that are hard to manage when you’re unwell all added to their stress. 

Having to explain their mental health again and again to different organisations was another common frustration. Each new conversation means going over the same painful ground, often with someone who can’t see what you’ve already said elsewhere. 

Many people turn first to their GP or mental health service, as nearly two thirds of members had in the past year. But fewer than a third had ever been asked by a health service whether money was worrying them. That’s a serious missed chance to spot problems early and point people towards support. 

Free debt advice helped most of the members who had used it, but only around a third had used it at all. Online benefits calculators helped far fewer people which is unsurprising when you consider that accessing those benefits requires paperwork that’s all too difficult when you’re already struggling with your mental health. So it’s telling that the change members ranked highest was free one-to-one help to check they were getting everything they were entitled to.

Stress Awareness Day encourages people to focus on what we can each do to manage stress. But much money stress comes from systems that are hard to deal with when you’re unwell. 

Our members told us what would help:

• Telling one organisation about your mental health once, and having it shared with others with your permission. Two thirds of members said this would help a lot
• More time to catch up on council tax before being asked to pay the whole year’s bill. 77% of members who had fallen behind said this would help a lot. It’s the focus of our Council Tax Trap campaign
• The DWP checking what people can afford before taking money from their benefits to repay a debt. 69% of members who’d had money taken this way said this would help a lot. 
• Limits on how often companies and councils can get in touch about money owed, as part of our call to Stop the Debt Threats.

Talk Money Week reminds us that small actions can make a difference; but that includes the actions of creditors, councils, the DWP and health services. Small changes to how those services work could make the biggest difference of all to people facing financial stress.