Poor financial health and mental health “feeding off each other”, warns report

Amid rocketing rates of diagnosis for anxiety, and with 7.3 million English adults already having received antidepressants by 2017-18, a new report from the Joseph Rowntree Foundation establishes many connections between financial insecurity and poor mental health.

It is calling for more to be done to protect millions of Britons who are feeling exposed at a time of rocketing prices and interest rates.

Reforms to rental and employment laws which JRF has long called for could, on the strength of the new report’s findings, bolster not only financial security but might also begin to address the mental health problems which cost the health service around £15bn a year, and the wider economy an estimated £100bn plus.

Concentrating on data from just before the pandemic and current cost of living crisis, the JRF looked at 12 important indicators of mental health and well-being from a large nationwide survey. It found renters are at least twice as likely as homeowners to report losing sleep, feeling under strain or depressed, and also at far greater risk of lacking both energy and calm in their lives.

It also found that people employed in insecure ways, such as zero-hours contracts, have poorer mental health than secure workers.

Taken together, the OECD numbers on people who are either on a very low income (and so automatically exposed to any economic shock) with the OECD’s tally of those whose low savings put them at risk of falling into poverty, the JRF report suggests that Britain has more economic insecurity than Italy, France or Germany, although less than the USA. Factoring in the extremely low rate of British unemployment benefits further darkens the picture.

The report finds that two major 21st Century trends have exacerbated the insecurity problem. First, a “swing” of around 10 percentage points of the whole working-age population out of homebuying and into a private rentals, in a market where rents are uncapped and insecurity of tenure is rife. Second, a growth since the dawn of the financial crisis, of between four and eight percentage points depending on the data-set used, in the proportion of households classed as having no savings at all.

Tom Clark, JRF Fellow and Journalist, who authored the report, said the findings pick up on a rising sense of insecurity.

“It interrogates the potential connection between the shaky foundations of material life for many of our citizens and burgeoning signs that a growing anxiety problem is gripping the country.

“Too many people are caught up in a vicious cycle in which mental distress impedes confidence, leading to problems at work, which can in turn lead to issues with debt, housing and even relationships, leading to still more worry.

“While more analytical work is needed, what’s already clear is that the UK has big, and on many measures, growing problems with both material insecurity and mental distress, and that the two very much seem to be linked.”

Delivering his Autumn Statement to the House of Commons earlier this month, Chancellor of the Exchequer Jeremy Hunt outlined government plans on spending and taxation, saying that he was delivering a plan to tackle the cost of living crisis and rebuild the economy.

In the plans, Hunt announced that benefits would increase with inflation (10.1%) with the benefit cap also lifted, and that social rent increase would be capped at 7%. Many in the social work and social care sector have warned that the plans do not go far enough.

Responding to the statement, BASW UK’s Chief Executive Dr Ruth Allen said: “We welcome the Chancellor’s announcement of additional funding to tackle the cost of living, such as uprating benefits in line with inflation. But uprating benefits was the minimum action that a Government committed to improving standards of living should deliver, and it is does not magically fix the other problems that are facing people hardest hit by rising prices. Benefits were already at a paltry level and uprating with inflation simply means that people who receive benefits are not worse off.”