Mental health is found to be a key factor in people’s ability to manage personal debt by following debt advice according to new research.
This is the first time research examining the impact of mental health on debt advice adherence has been carried out.
The research follows as one in four people in the UK now experience mental health issues and as the cost of living crisis deepens.
Recently published in the International Journal of Social Psychiatry, the research was led by Aberdeen University’s Business School and Queen’s University Belfast.
Severe debt leads to ‘substantially’ poorer mental health
The research comes at the beginning of Mental Health Awareness Week which begins today, May 9.
MENTAL HEALTH AWARENESS WEEK 2022💚
This week is mental health awareness week and the spotlight is shining on Loneliness. Loneliness effects millions of people here in the UK every year and is a key driver for poor mental health. 🧠 #TacklingTheMind pic.twitter.com/vPElaZLBxu
— KickStartFC (@Kick_Start_FC) May 9, 2022
As part of the study, those taking part had their mental health assessed along with their ability to recall the information discussed during debt advice appointments.
It also examined attitudes held towards Individual Voluntary Arrangements (IVA) and the level of trust in the advisors. Their adherence to listening to guidance was measured ten weeks later.
It was discovered participants who suffered from worse mental health were less likely to have followed the advice they had received than those with better mental health.
Co-author of the report and research fellow at Aberdeen University, Dr Nicole Andelic, described the study as a “rare opportunity”.
She said: “What it showed us was that although debt may lead to worse mental health, poor mental health also correlates with difficulties escaping from problem debt.
“In fact, we know that these participants had poor mental health prior to deciding not to take the advice offered to them, rather than as a result of not following this particular piece of advice.
“Indeed our study also suggests that people with very severe debt problems have substantially poorer mental health than the general population, regardless of whether they adhere to debt advice or not.
“This means that the people who need the advice most may be the least likely to follow it. As a result, mental health needs to be taken into consideration when advising people with debt problems.”
People in debt need more support
Professor Aidan Feeney, deputy head of the school of psychology at Queen’s University in Belfast, added that there remains a lot of stigma around the issue of debt.
Hee said: “Unfortunately, the experiences of people with problem debts have not received enough attention from researchers or from policy makers.
“Given that being in debt is itself likely to cause poor mental health, the current financial climate may result in thousands of people being caught in a cruel indebtedness trap.
“The mental ill health caused by their indebtedness renders it difficult for them to make good financial decisions about how to work their way back to financial health.
“As well as advice on the mechanisms available to them, people with problem debts need support as they make very difficult decisions between the available options.”