Report links depression and the cost of living crisis – but are advisers seeing evidence with clients? Reaction

by | Dec 6, 2022

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As the cost of living crisis continues to hit families and businesses alike, the ONS published a report this morning about depression and the cost of living crisis. There is a clear link (see below) between depression and people struggling with energy bills, mortgage and rent payments, and increased personal debt. Around 1 in 4 (24%) of those who reported difficulty paying their energy bills experienced moderate to severe depressive symptoms, which is nearly three times higher than those who found it easy to pay their energy bills (9%).

  • Around 1 in 4 (27%) adults who reported difficulty in affording their rent or mortgage payments had moderate to severe depressive symptoms; this is around two times higher compared with those who reported that it was easy (15%)
  • Nearly a third (32%) of those experiencing moderate to severe depressive symptoms reported that they had to borrow more money or use more credit than usual in the last month compared with a year ago; this is higher compared with around 1 in 6 (18%) of those with no or mild depressive symptoms.

Newspage sought the views of IFAs and mortgage brokers if they’re seeing evidence of this with clients and there were some interesting responses as follows:  

Matthew Jackson, Director at Mint FS:

“I spoke to a client yesterday who had just had notice of a 4th rent increase in 18 months from her landlord. In order to pay the increased rent, they were putting spending onto credit cards and dipping into savings. The stress in her voice and face was evident. The latest rent increase pushed their affordability even more and this is before they factor in the cost of heating which they are now needing to use as they have small children. A mortgage would be cheaper than renting, but the reduction in their savings means a smaller potential deposit and they have a less than perfect credit score. This is the neverending cycle that too many families find themselves in and a knock-on effect of the mini-Budget and cost of living crisis that is causing real stress and strain on families around the country.”

Samuel Mather-Holgate, Independent Financial Advisor at Mather and Murray Financial:

“These latest statistics are really concerning. Britain was in a mental health crisis prior to the pandemic and, of course, that made things significantly worse. The current cost of living crisis in compounding the situation and I am really worried that the government don’t seem to be looking after those who need it most. It is clear that there is a major link between having to borrow money or not be able to afford your bills and anxiety and depression. For the government, this should not be just a social priority, but if you are suffering from depression caused by your economic situation you are less likely to be able to work. Thankfully, there are some great debt charities out there to help people who need it. StepChange are fantastic and help those with debt who are struggling with their repayments. Citizens Advice can help if you are worried about your energy bills or rent. On top of that, there are also some great counselling charities to help if you need to speak with someone about mental health. The NHS has huge waiting list for people who need some kind of talking therapy so look for local charities. LIFT, in my local area Swindon, does great work when the wait for the NHS is just too long.”

Zaid Patel, Director at Highcastle Estates:

“The tenants given to us by the Local Authority seem to be the ones who are suffering the most. They are already struggling as they’re in temporary accommodation, but with the cost of living crisis, many are stressed as they are having to choose between heating their home and feeding their children. Feeding themselves is not even an option.”

Lewis Shaw, Owner and mortgage broker at Riverside Mortgages:

“These are very worrying statistics, but sadly it’s unsurprising to see them. I’ve spoken to many clients over the past few months who are feeling the pinch and are worried about the direction of travel for both mortgage rates, energy costs and the recession. The incessant rolling news telling everyone we’re in a crisis isn’t helping. While what they’re saying may be true, perhaps broadcasters should have more of a duty to understand the fear they’re striking into the hearts of ordinary hard-working Brits who are suffering at the sharp end. The NHS is already stretched to breaking point, so the last thing we need is a mental health crisis blowing up. When will politicians of all stripes realise that we need a new economic settlement? People need more money in their pockets, and there’s plenty of money floating about; it’s simply that no one has the wherewithal to put into action what needs to be done. Tax wealth, for god’s sake, before the country devours itself.”

Samuel Gee, Director at Manning Gee Investments Limited:

“The link between stress, depression and personal economics has surely been with us for millennia. With mental health taking a centre stage over recent years, this is only going to come more to the forefront. It’s a good thing the stigma has been eroded. The cost of living crisis hits to the heart. It’s not being unable to buy that flat screen TV, it’s being unable to heat your home. The effects of that are not only personal, they affect those you love and provide for, and if you’re less able or even less confident that you can provide the basics, such as food and heat, it’s no wonder your mental health is going to take a toll. And who wouldn’t stretch this out with credit if it was available? If people are happy to do anything to ease the burden, then borrowing excessively on credit is likely to be the least of their immediate worries, and so the stress-spiral continues. As the saying goes, money doesn’t buy happiness, but it makes being miserable a whole lot easier.”

Gary Boakes, Director at Verve Financial:

“As a company, this is something we have been seeing more and more of. Improving financial wellbeing and mental health is something we are very passionate about and we want to do something to improve ourselves and also to be able to help any customer that calls or walks through our doors. So everyone at Verve Financial is now either a Mental Health first aider or going through the process at the moment. We believe that anybody that comes to speak to us is potentially in a vulnerable position, whether that is divorce, receiving an inheritance through death, mortgage payments shocks or the rising cost of living crisis. So we wanted to be more approachable, improve our ability to listen and communicate non-judgementaly, to be able to give support and information and to encourage them to get support or professional help. We believe that this will put us in a better position to help people in what is going to be a very challenging 12-18 months.”

Carla Hoppe, Founder at Wealthbrite:

“The question really is what do we do about these statistics? There is no new money coming from Government and individuals can’t afford to pay for therapy, counselling or other forms of mental health support. Increased mental health concerns manifest in increased absence, long-term sick and low productivity – all good reasons for business to step in and step up by providing increased support for their people’s mental health and the underlying concerns about money with financial literacy programmes, debt management support and personalised financial coaching. We can’t afford to do nothing.”

Fanny Snaith, Owner at Fanny Snaith – Certified Money Coach:

“Stress about money issues is growing noticeably. Clients are coming to me because they don’t know what to do about increased mortgage payments. “Janet” has a rental property. The mortgage was agreed upon nearly 5 years ago, at 51% of the property value. Like many buy-to-lets, the mortgage payments are interest-only. The payment at the current rate of 2% is £672. In March next year, her fixed term runs out. Should she only manage to get a new deal of 5%, the monthly payments rocket to £1952, which pretty much equals the rent. So what to do? Janet is stressed and has to consider all options, which includes selling up. The tenants are stressed and are wondering what else is available within their budget as one option Janet has is to increase the rent, which they cannot afford. This problem is becoming more and more common each day and there’s no end in sight.”

Amit Patel, Adviser at Trinity Finance:

“Thousands of people up and down the country face the stark reality of either eating or heating their homes and the colder months still lay ahead of us. Years of underfunding by the Tory government has left the UK in this predicament. This is a toxic environment which could have been averted had the right choices been made under there stewardship. Depression has many consequences on the mental health of people and in the worse case scenario it can ultimately mean someone takes their own life.”

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