South East adults say that their personal or household finances are the most likely factor, from a list of common causes of stress and anxiety, to have a negative impact on their mental health, according to a new survey of over 2,000 people by insolvency and restructuring trade body R3 and ComRes.
More than a quarter (27%) of South East adults say that their personal or household finances are currently having a negative impact on their mental health – 4% of British adults also say the finances of other family members are having the same effect.
Personal or family members’ health issues (25%), an individual’s or family members’ job (15%), UK or global current events (15%), and relationships with family (11%) complete the top five.
Mike Pavitt, chairman of the Southern Committee of insolvency trade body R3 and corporate restructuring and insolvency partner at Paris Smith solicitors, Southampton says: “Whatever else is going on in the world, things much closer to home are most likely to affect people’s mental health. No matter how old you are, where you live, or what you do, personal finance concerns – even concerns about others’ finances – have a significant impact on your wellbeing.
“Much more needs to be done to ensure that people are informed about what their options are when they encounter financial problems so that they can deal with them without unnecessary stress. Improving financial education and financial capability could have a huge, positive impact on the country’s mental health.”
Mike adds: “The personal finance landscape is relatively benign at the moment: real wages are still growing and interest rates are low. Yet personal finance concerns still loom large. With inflation set to rise throughout 2017, personal finance pressures are likely to increase.”
“The insolvency regime is there to help people with very serious financial problems resolve their debts and the associated stress and start again financially. Unfortunately, there remain arguably unnecessary barriers to people accessing insolvency procedures that could help them. People wishing to enter bankruptcy, for example, typically face paying £680 in government fees before they can access debt relief. These fees could be paid over the course of a bankruptcy instead.”
Of the factors looked at, personal or household finances are the leading issue having a negative impact on mental health for all age groups except those aged over 55, who say that personal or family health issues are more likely to have a negative impact on their mental health (26%, compared with 13% for personal or household finances).
Mike Pavitt comments: “The biggest pinch comes for those in the 35-44 age bracket. Many in this age group are paying a mortgage, have children to support, and may even be supporting their parents, too. It’s no surprise that it’s this age group that is most worried about their debts, most likely to struggle to payday, enter an insolvency procedure, and say their finances have a negative impact on their mental health.”
The impact of personal or household finances on mental health is felt more acutely by women (27%) than by men (20%), and by those aged 35-44 (34%,compared with 30% or less for other age groups looked at).
What causes financial worries?
The survey also found that 41% of South East adults say they are worried about their current level of debt – rising to 54% among those aged 18-44 – while 39% of South East adults say they often or sometimes struggle to make it to payday.
Mike Pavitt says: “Financial concerns are endemic for a significant proportion of South East adults and come from all different directions. Credit card debt is a common concern for those with debt worries, especially for older age groups: over half [51%] of South East adults who say they are worried about their current level of debt say they feel that way because of credit card debt.”
“Other debts cause people to feel anxious, too. One in every seven people who say they are worried about their current level of debt say they feel that way because of loans from family or friends; one in twenty 18 to 44 year olds worried about their current level of debt attribute this to payday loan debt; and 58% of 18 to 24 year olds worried about their current level of debt worry about their student loans.”
Mike adds: “The most likely cause of a struggle to payday is simply paying for basic goods. Over half [57%] of British adults who say they often or sometimes struggle to make it to payday say this is the result of the cost of food; this rises to 60% among those aged over 55. Household energy costs [44%] and fuel or transport costs [37%] are the next most common reasons mentioned.”
Full data tables are available from R3 on request.
9 TOP TIPS FOR DEALING WITH DEBT
1. Acknowledge the problem. Avoiding personal finance problems will only make them worse.
2. Ask for help. Professional advice is readily available and is often free of charge, whether it’s an initial meeting with a licenced insolvency practitioner, or help from the National Debtline, or a local Citizens Advice Bureau.
3. Prioritise the payments of your debts. An advisor, as mentioned above, can help.
4. Budget. Be honest with yourself, identify your essential financial commitments and cut back on luxuries. At the very least, maintain the minimum monthly credit card payments to retain your credit rating while you sort out your finances.
5. Communicate with your creditors. By getting in touch with your creditors at an early stage, you can give them an opportunity to help that might not be there in future.
6. Be transparent. Give full details about your financial situation to both your advisor and your creditors.
7. Take your time before choosing the solution that’s right for you. Don’t allow yourself to be pressurised, and make sure you are taking advice from a regulated professional.
8. Don’t keep digging. Avoid turning to new credit cards or payday loans to plug the gap in your day-to-day finances. This might only make your situation worse.
9. Learn about your options. If you require a formal insolvency procedure, there are a number of options appropriate to different levels of debt. Formal options include Debt Relief Orders (DROs) for smaller debts, Individual Voluntary Arrangements (IVAs), and bankruptcy. It will cost more time and money if you start off in the wrong solution, so make sure you take advice about all the options open to you.
