One in three people regularly worry about money to the extent that it has a negative impact on their mental health, according to new research. As Mental Health Awareness Week kicks off on 13 May, charities and consumer groups are urging those in debt to seek help early to avoid a downward spiral in their health and wellbeing.

Debt is often a major factor for those suffering with stress and anxiety, and the two issues can feed into each other, creating a vicious cycle.

James McNicol, 44, has personal experience of this. McNicol is self-employed with a computer repair business but says he struggles with the fluctuations in workload and cashflow. Over the past five years he has built up significant debts. During quiet periods McNicol worries about money, which has a knock-on effect on his sleep and mood.

McNicol has never been diagnosed with anxiety and depression, but his wife Paula, a pharmacy assistant, was concerned at the rapid decline in his mental health. Finally in January this year they sought help to get their finances back on track. The couple first took advice through the charity Christians Against Poverty, which put them in touch with an ethical debt management organisation.

“I was in a bad place. I was worrying about my debts and wasn’t focusing on my business. This meant less work was coming in. It was a downward spiral and it had gone on for years,” says McNicol, who lives in Maidstone in Kent.

“Just getting a debt management plan in place and speaking to someone has been like a massive weight lifted. It will take years to clear the debts but now I can see a light at the end of the tunnel.

“I’d never spoken to anyone about my debt or my mental health before. It was difficult at first. But after taking that first step, things were so much better.”

The situation is often compounded by the double stigma around mental health and our money, says Helen Undy, chief executive of the Money and Mental Health Policy Institute. “It can make it difficult for people to open up about what they are going through and seek help. This has to change as it is destroying lives.”

Research published by the institute in March this year found a strong correlation between debt and mental health, with those with mental health problems three times more likely to be in debt. Almost half – 46% – of all people in debt said they also faced a mental health problem.

Undy has urged the government and regulators to do more to ensure the financial services and debt collection industries support those falling into debt, particularly where the problems are compounded by a mental health condition.

McNicol feels there is a direct link for him between feeling in control of his finances and his wellbeing. This is something echoed strongly in a recent survey conducted by the consumer website Topcashback. As well as 35% of people saying they regularly worry about money so much it affects their mental health, it also found that those in debt felt out of their depth when trying to get their finances sorted out. For almost seven in 10 people – 67% – a key element of feeling “financially well” was being in control of their money and not overspending.

Dr Jed Boardman is lead for social inclusion at the Royal College of Psychiatrists. He says: “Although we’ve come a long way and there is less stigma around mental health and debt problems, for those struggling, they often see it as a personal failure. Many talk about the shame associated with debt, so they don’t want to speak up even when they are in crisis. If they are already anxious or depressed, it can be hard to keep things in perspective.”

If you are struggling to manage your debts, or your finances feel out of control, it is important to take action quickly. Debt advice charities such as National Debtline and StepChange are free and impartial, and can help you (or someone acting on your behalf if you feel unable to do so) negotiate with your creditors. If you choose to inform your creditors of a mental health issue, you can use a “debt and mental health evidence form”, which is a way of accessing the support and forbearance that is available.

A survey shows there is often a direct link between feeling in control of your finances and your wellbeing. Photograph: Astrakan Images/Getty Images/Cultura RF

Under the lending code followed by most banks, building societies and credit card companies, creditors are required to treat those in debt, and particularly those with mental health issues, sympathetically and help find solutions by way of a reasonable repayment plan.

National Debtline says one in seven callers cites mental health problems as the reason they got into debt. Jane Tully of the Money Advice Trust charity which runs National Debtline says: “I would encourage anyone worried about money to seek free, independent help as soon as possible. More than one-third of people wait more than a year before contacting us, during which time their situation can worsen.”

And Laura Peters, head of advice and information at the charity Rethink Mental Illness, says: “The most important thing to remember is that there is no shame in asking for help. Services like ours specialise in helping people take first steps to improving their financial and mental wellbeing.”

Talking through the problem with a family member, debt adviser or work colleague is often the turning point.

Case study

Daniel Wright, 31, from the West Midlands, has autism and found it particularly difficult when he moved from being unemployed and receiving benefits every two weeks to being in full-time employment and paid monthly.

Wright, a civil servant, says he struggled because his payday was not the same every month, and he could not keep track of direct debits going out of the account and also his day-to-day budgeting. He also became prone to spending sprees.

“The problem went on for years after I got my job, and I ended up in a mess with significant debts,” says Wright. “I became withdrawn, depressed and irritable and it affected my relationships at work and with my partner. I was worried about my debts, but then I was buying things on impulse. In January this year a colleague, who noticed a change in my behaviour, asked if I was OK, and I just broke down.

“It was the best thing that could have happened. My colleagues were so supportive. I got in touch with a debt management group and I’m on the right path to getting my debts cleared through an IVA [individual voluntary arrangement]. I also now have a weekly meeting with my manager at work to chat about how I’m doing.”

Mental Health Awareness Week, hosted by Mental Health Foundation, takes place from 13-19 May

•This article was amended on 14 May 2019 to change Dr Jed Boardman’s job title

Contacts

National Debtline, 0808 808 4000

StepChange Debt Charity, 0800 138 1111

Citizens Advice, 03444 111 444

Christians Against Poverty, 0800 328 0006

Mind, 0300 123 3393

Rethink Mental Illness, 0300 5000 927

SANE, 0300 304 7000