World Mental Health Day: Time to tackle financial inequalities for people with mental health problems

For those of us who work in mental health, awareness days like World Mental Health Day can bring mixed feelings. While we welcome new conversations about mental health, awareness days can be an opportunity for the mental health equivalent of ‘greenwashing’. Politicians, businesses and celebrities can offer platitudes about the importance of mental health and wellbeing, without addressing the shockingly bad outcomes that people with mental health problems face in so many areas — from healthcare to employment and housing.

This year’s World Mental Health Day — with its theme of “Mental Health in an unequal world” — should be a chance to rectify this. As Andy Bell from the Centre of Mental Health (and a member of our Advisory Board) said this week, it’s a moment to “put the ‘awareness’ and ‘lifestyle’ advice to one side and focus on challenging the inequality and injustice that drive so much mental ill health”.

In that spirit, this blog sets out some of the biggest inequalities that people with mental health problems face when it comes to their finances — and how politicians, regulators and businesses can address them.

Research undertaken for our Mental Health and Income Commission shows that typical income for people with common mental health conditions is £8,400 lower than for the rest of the population — a shocking gap which has left this group much more exposed to financial hardship during the pandemic.  The research also shows that the key drivers of this issue include the barriers to employment and job progression that people with mental health problems face. These range from a lack of flexible working practices to discrimination in the workplace. 

To ensure this gap doesn’t grow further, we need urgent action from the government to help people with mental health problems stay in work during the pandemic and its aftermath, and long term changes to tackle the systemic employment issues which have driven the ‘mental health income gap’. 

These include enshrining the right to flexible working arrangements, increasing levels of Statutory Sick Pay and ensuring more workers can access it, and compelling employers to report on the mental health pay gap and on flexible working requests.

Problems with the benefits system have been well publicised recently, especially with the government’s extremely unwelcome decision to cut the £20 uplift on Universal Credit payments. What is less well understood is that problems with the benefits system disproportionately affect people with mental health problems. 

This is in part because people with mental health problems are more likely to be receiving benefits. But another big part of the problem is the fact that the benefits system simply isn’t set up in a way that meets the needs of people with poor mental health, or reflects the challenges they face. 

Our research shows that people with poor mental health face unnecessary stress at every stage in the process of claiming benefits — from dealing with complex bureaucracy, to going through stressful assessments that don’t recognize the impact of people’s mental health problems. And as our Set Up To Fail campaign highlights, too many people with mental health problems have to go through this process alone, because the Universal Credit system makes it too hard for people to get support from loved ones. 

We want the government to increase the generosity of benefits, especially at a time when so many people are facing financial difficulty. But we also need the government to change the system, to make it easier for people with mental health problems to access the support they’re entitled to.

Dealing with essential services providers — such as banks and energy companies — can be difficult for anyone. But for the millions of people across the UK experiencing mental health problems, it can feel like an impossible task. As with the benefits system, in part the problem is that too often these services are not set up or delivered in the way that reflect the challenges that customers with mental health problems face. 

For example, more than half of people with mental health problems face serious difficulties using the phone to carry out essential admin, and four in ten have severe ‘admin anxiety’ — leaving them unable to effectively use essential services..

Through our Mental Health Accessible programme, we are working with businesses to help them address these problems and to make it easier for people with mental health problems to choose, use and pay for their services. This is even more vital given the ongoing energy crisis, and the resultant stress and rising costs it will bring for consumers.

But if accessibility is one part of this problem, outright discrimination is another. Take travel insurance, for example. Our analysis shows that when people who have experienced mental health problems disclose this to travel insurers, they face significantly higher premiums, limited access to cover or cover that excludes their mental health problems as a result. Through a mystery shopping exercise, we saw that premiums went up by as much as 400% for people with past mental health problems, and 2,000% for those with severe mental health problems. 

The Financial Conduct Authority, which regulates financial services, has so far declined to look at how insurers determine prices for people with health conditions. It needs to revisit this decision if we are to stop people being penalised for having experienced poor mental health.