
• It found clear evidence to support the connection between mental health difficulties and financial challenges
• The pandemic and cost of living crisis have significantly worsened mental health and financial challenges in the UK, with vulnerable groups particularly affected
• It calls for focused interventions to alleviate the burden and enhance overall wellbeing.
The Centre for Personal Financial Wellbeing at Aston University has released a report outlining the findings of a rapid evidence funded by the Money and Pensions Service (MaPS) review on the relationship between money and mental health in the United Kingdom.
The rapid evidence review shines a light on the impact of personal financial circumstances on mental wellbeing and highlights how the context of the COVID-19 pandemic and the current cost of living situation have shaped these issues.
The review concluded that there is strong evidence to support the connection between mental health difficulties and financial challenges, with individuals facing mental health issues being more likely to experience personal and household financial struggles. People in lower paid occupations and reliant on employment support were prevalent among this group, with half of those experiencing mental health problems in 2020 having a gross annual household income of £28,000 or less, compared to only one-third of those who did not experience mental health problems.
The evidence also shows the extent to which financial difficulties can exacerbate mental health problems, as people facing financial challenges such as debt were more likely to experience suicidal thoughts or feelings.
Furthermore, the evidence demonstrated that the pandemic and the cost of living crisis have significantly worsened mental health and financial challenges in the UK. One in four people experienced a mental health problem for the first time during the pandemic, and the proportion of people reporting mental health challenges has increased from 21% to 30% since 2018.
The review also highlights the specific vulnerability of certain groups to the confluence of mental health and financial challenges. Households with disabled family members have been particularly affected, with 77% reporting an impact on their mental health due to the cost of living. Women facing mental health challenges were more likely to experience financial difficulties resulting from the current cost of living situation, such as difficulty meeting everyday payments or reducing savings. Minoritised groups, who are more likely to experience poverty and deprivation, face additional mental health burdens, including trauma, grief, isolation, bullying and racism.
Professor Andy Lymer, director of the Centre for Personal Financial Wellbeing at Aston Business School, co-authored the review and said:
“The relationship between mental health and financial challenges is considered to be a complex cycle, where chronic stressors like financial hardship deplete psychological reserves, making it harder to overcome future challenges.
“The widely held perception that financial difficulties stem from personal responsibility failure reinforces feelings of blame or inadequacy, adding to the stigma associated with both mental health and financial challenges.
“This comprehensive evidence review serves as a call to action for policymakers, researchers and healthcare professionals to prioritise the mental health and financial wellbeing of individuals in the UK. By recognising the intricate links between money and mental health, and the exacerbated challenges posed by the COVID-19 pandemic and the cost of living situation, I hope that targeted interventions and support can be developed to alleviate the burden on those affected and improve their overall wellbeing.”
Dr Hayley James, a senior research fellow in the Centre for Personal Financial Wellbeing at Aston Business School, who also co-authored the review, said:
“Our review confirms that people experiencing mental health problems have been disproportionately affected by financial issues during and after the COVID-19 crisis. They were more than twice as likely to have fallen behind on payments and to have missed multiple payments compared to those without mental health problems.
“The strain of the current cost of living situation has left a substantial portion of UK adults feeling anxious, depressed, or stressed due to financial concerns. Over half of the respondents reported negative impacts on their mental health, and this effect was more pronounced among those in debt.
“The report emphasises the urgent need for targeted support and interventions for the affected communities.”
For further information about the report visit https://www.fincap.org.uk/en/reviews/money-and-mental-health-rapid-evidence-review
- Notes to editors
About the Centre for Personal Financial Wellbeing at Aston University
The Centre for Personal Financial Wellbeing at Aston University is an interdisciplinary, academic, research centre that seeks to get to the heart of the causes and consequences of personal and household financial insecurity. It focuses on providing accessible and timely insights to support a wide range of leaders and decision makers including those in the financial service industry, third sector organisations, academics as well as the general public. For more information, visit: aston.ac.uk/cpfwAbout Aston University
Founded in 1895 and a university since 1966, Aston is a long established university led by its three main beneficiary groups – students, business and the professions, and the West Midlands region and wider society. Located in Birmingham at the heart of a vibrant city, the campus houses all the University’s academic, social and accommodation facilities for our students. Professor Aleks Subic is the Vice-Chancellor & Chief Executive.
Aston University is ranked 22nd in the UK in the Guardian University Guide, based on measures including entry standards, student satisfaction, research quality and graduate prospects. The Aston Business School MBA programme was ranked in the top 100 in the world in the Economist MBA 2021 ranking.
For media inquiries in relation to this release, contact Sam Cook, Press and Communications Manager, on (+44)7446 910063 or email: s.cook2@aston.ac.uk