Strong Link Suggested Between Debt and Mental Health Problems

8th November 2009

Recent research published on 8 October 2009 by the Royal College of Psychiatrists and Rethink, funded by the Money Advice Trust (MAT) and the Finance & Leasing Association (FLA) states that one in two British adults in debt may also have a mental health problem.

The literature review has been endorsed by television personality Stephen Fry and strategist Alastair Campbell. Stephen Fry has a bipolar condition that has caused him to go on a number of spending sprees. His first-hand experience highlights some of the higher profile difficulties of debt brought on by poor mental health.

Anthony Sharp, Chairman of the Money Advice Liaison Group (MALG) commented:

"The Psychiatric Morbidity Survey for 2000 indicated that one-in-eleven British adults is in debt (being 'seriously behind' with at least one bill or commitment). Further, one-in-two British adults in such debt has a mental disorder, and one British adult in four with a mental disorder also reports debt.

"These new statistics are startling, but perhaps not totally unexpected in these recessional times.

"As Chair of the Money Advice Liaison Group I commend creditors, debt collection companies and advisers to ensure that they are conversant with the MALG 'Good Practice Mental Health Awareness Guidelines' and the Debt & Mental Health Evidence Form where there are cases of individuals whose mental health condition is such that they are unable to manage their financial affairs. These documents have been produced to facilitate work with those with mental health conditions and are downloadable from the web."

From 1 November 2009 the Lending Standards Board - an independent body - will look out for the interests of borrowers and monitor the actions of lenders and their debt collectors. They will oversee the operation of new industry standards set out in the Lending Code. The new Lending Code includes rules which apply to:

• financial difficulties and debt collection
• helping customers in debt who have a mental health condition

Kevin Still, Director of EuroDebt, added: "It is important that the debt advice, creditor and credit services sector collaborate together to treat vulnerable people fairly where they have unmanageable debts and a mental health condition. The MALG good practices have helped clarify how debt management companies can assist in this process in their negotiations with creditors and their debt recovery agents. The new Evidence Form is much easier to deal with and we have trained personnel that are able to use the form."

The full report can be downloaded here, at the
Royal College of Psychiatrists website.

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