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Six in ten people in debt affected by mental health problems

10 October 2014

Six in ten people in debt affected by mental health problems

Citizens Advice calls for responsible lending on World Mental Health Day

Citizens Advice has revealed that six in ten of its debt clients have had a mental health problem within the last six months.

On World Mental Health Day Citizen Advice is highlighting the relationship between debt and mental health. For people struggling to make ends meet money worries lead many to feel stressed, depressed and anxious. For some people with mental health conditions, their diagnosis can mean lead to behaviour which means they are more likely to get into debt.

Figures from an upcoming report by the charity show that in over half of cases (56 per cent) debt advisers believe their client’s ability to make reasonable decisions about taking out credit was affected by their mental health problems.

Citizens Advice is calling on lenders to do more to encourage people to disclose if they have a mental health problem when applying for credit.  In 4 in 10 cases (41 per cent) debt advisers believe their client’s mental health problem would have affected their ability to understand the terms and conditions of a loan.

If a lender is aware that a customer has a mental health problem they can help them manage their finances accordingly. Lenders must be clear that the information will help them to support customers, not discriminate against them by unfairly affecting their ability to get credit.

Further research by Citizens Advice finds that almost three in four people (73 per cent) seeking debt help from the charity said their money worries were making them feel stressed, depressed or anxious. Debt is one of the main issues Citizens Advice supports people with, and over 400,000 received help in the last year.

A number of Citizens Advice Bureaux now operate outreach services in health setting such as GP surgeries, where they can offer people advice on the issues which may be worsening their health problems.  Derbyshire Citizens Advice bureau provides advice from 98 of the 102 GP surgeries in the area.  Some patients reporting they have been able to stop taking medication for depression after the advice helped them sort out their money worries.

Gillian Guy, Chief Executive of Citizens Advice, said:

Responsible lending must be the backbone of the financial industry. As more financial institutions adopt online credit applications it is more important than ever that systems exist to recognise where people have mental health issues. Supporting customers with mental health problems is a real for challenge banks, but one that they must not shy away from.  By offering help to these customers firms can enable them to manage their finances and avoid getting into unmanageable debt.

The finance industry has made some progress in its debt collection processes for people with mental health problems but this has not been matched by their taking responsibility at the point of sale. Just because someone has a mental health problem does not mean they are unable to manage their finances.  But protections should be in place to prevent people with conditions such as bipolar disorder from racking up debts because of their illness.

Alice* has a diagnosis of bipolar disorder and has previously gone on extravagant shopping sprees when going through a manic phase, getting into significant levels of debt. On several occasions she has been offered more credit despite the fact that she is clearly very unwell. She was once given £1,000 credit on a shop store card, even though she had already got into debt with the same shop. Alice expressed doubts about whether she should be allowed to take out more credit but the assistant encouraged her to apply.

Nina* got into debt after having to give up work as a care assistant. The reduction in income saw her existing debt problems spiral out of control. Struggling to keep up with the payments on a payday loan and a bank loan, and suffered from severe anxiety and depression. Desperate to keep up repayments and to afford food, Nina has taken out a subsequent two payday loans which she can’t keep up with. She says she has received up to 10 phone calls a day from the companies harassing her to make repayments, further worsening her mental health.

Notes to editors:

  1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
  4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
  5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
  6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.