Mental health and debt problems: 'A marriage made in hell'

Much has been written about the easy availability of debt at a time of record low interest rates.

The latest data showed that consumer credit was growing at the fastest pace in a decade.

The consumer boom of recent years, with memories of the financial crash apparently fading, has been well documented.

Not so much has been written or analysed on the impact of debt on people's health. That's what one leading personal finance expert wants to put right.

Martin Lewis, the personal finance expert, has announced the launch of a new think tank, the Money and Mental Health Policy Institute.

He says he has had his own challenges in the past: "Thankfully while I don't have a clinical condition I've suffered from extreme stress at times, with my own dark days, where I've been unable to get out of bed or cope with the world.

"At those moments I was incredibly thankful that I could take time off and still pay the bills without worrying. I set my mind then to trying to do something, in the area where I can have most impact to improve things."

He has a stark assessment of the problem, saying: "Mental health and debt problems are a marriage made in hell."

The new institute will, he says, research new policies aimed at helping people with mental health problems protect themselves from financial struggles and work with banks and regulators to implement change.

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There is not a lot of recent data covering the link between consumer finance and mental health.

A study from Psychological Medicine in 2008 suggested that one in two British adults with a debt problem also has a mental health problem.

The Journal of Public Health Medicine published research in 2009 which concluded that one in four British adults with a mental health problem has problem debts, against one in 12 in the general population.

Campaigning charities like Mind say these findings tally with their own assessment of the issues involving debt.

Martin Lewis has revealed quotes from people who came forward after an appeal on Facebook illustrating the link between access to credit and mental wellbeing.

One says: "I have bipolar and was given huge amounts of credit which I spent while on a manic high, I am now in so much debt there's no way out which has an impact on my depression."

Another added: "I used to struggle really hard with finances. When my depression kicked in I would just buy things - I still do now if I have any cash, so it's impossible to save."

So what practical measures might help?

The new institute among other ideas will explore the possibility of voluntary credit freezing for people facing up to mental health issues.

If the card provider noticed unusual spending patterns the card could be blocked assuming the customer had already given authority for such intervention.

A so-called "trusted friend" would be empowered to unblock the card if the customer was felt to be in the right frame of mind to use it.

The banking industry has no objection in principle to such a move. A taskforce, backed by the British Bankers' Association and others, has been set up to look at how more help can be given to vulnerable customers.

An initial report advocates options to "authorise their carers and other people assisting them to help manage their finances and resolve account queries".

There is clearly a will but whether there is a way remains to be seen.

It is understood there are still legal obstacles which might be hard to overcome.

Powers of attorney can be set up under existing legislation but the challenge apparently is to find a more flexible and easier vehicle to allow "trusted friends" to take responsibility for an individual's credit card.

Martin Lewis hopes to make a difference to people affected by the financial consequences of mental illness.

That will be possible if action rather than words follows the launch of his think tank.

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