A major new policy institute dedicated to researching and finding solutions to the devastating link between mental illness and money problems was launched today, funded by a donation of at least £2 million from MoneySavingExpert.com founder Martin Lewis.
The Money and Mental Health Policy Institute aims to research and formulate policy solutions, then work with banks, lenders, regulators, health service providers and government to help people with mental health problems protect themselves from financial difficulties and get out of debt.
It will be run by Polly Mackenzie, a former special adviser at 10 Downing Street, and its trustees include Richard Lloyd, executive director of Which?, and Paul Kirby, former head of the Number 10 Policy Unit. Martin himself will chair its board of trustees.
MoneySavingExpert.com already offers some resources to help those affected by mental health and debt issues – see Martin's free Mental Health & Debt guide for more.
'Debt isn't just a financial problem'
Martin's set up the new institute based on clear evidence that mental health and debt problems are a marriage made in hell. Half of those with problem debts have a mental health problem, debt has been shown to worsen mental health, and mental health issues can cause serious debt.
Martin says: "I've been looking at debt and mental health for years, and written many practical guides – it's time to treat it like any other financial issue. Thankfully, business and the financial services industry have got far better at dealing with people who are having problems. Yet there's never been any real focus on prevention.
"It’s a privilege to be in a position to try and do something about that. As a first stage we want to look at ideas which could allow people to put financial controls in place when they’re well, for times when they’re out of control.
"For example, spending sprees are common both with clinical depression and bipolar hypomania. So being able to put a freeze on your credit file that takes eight weeks to unlock, so you can't apply meanwhile, would be useful. Lenders could also offer a 'high control' credit card option, so that if unusual spending patterns happen, the card is frozen for a set time unless a nominated trusted friend agrees to unfreeze it.
"This is the type of thing we want to research, and work with lenders to test and regulators and politicians to ensure the framework allows it to happen.
"Debt isn't just a financial problem – it causes relationships and families to break up, and people to lose their homes and their lives. Debt is a common problem for people living with mental health problems, and it can make those problems worse.
“It is my dream that in a decade’s time, when you call up to get lending you could say ‘by the way, I’ve got bipolar disorder’ and no one bats an eye – they just say ‘sure, we’ve a number of control options you may want to consider’."
'I lost everything'
A number of people struggling with mental health and debt issues have already contacted the institute to share their experiences.
Mandy from Gosport, who was diagnosed with borderline personality disorder in 2015, says after getting into debt she was put on a payment plan which helped her manage her debts, but the support ended abruptly after a year and the debt-chasing letters and phone calls which then followed became too much.
"I think all companies who deal with customer payments and ask customers to submit personal details for credit should have some form of health advice in place.
"It would help if they had one department that understands how to manage customers who can't reach financial agreement every month because the contrast between companies I had to deal with was massive. Some were helpful and some were relentless and frightening.
"For me the questions that need to be asked are: 'Do you have any mental illness and do you struggle to cope with credit?'"
Dom, a carpenter from Essex, says he racked up thousands of pounds of debt partly as a result of spending while struggling with depression, and said there's a particular need for support to help self-employed people struggling with debt and mental illness.
He says: "I might feel fine one morning and then a call comes in from a supplier saying I have to pay a bill and it knocks me off my stride and I find it difficult to focus on the job I need to do to earn the money I need to pay the bills.
"I think staged payments for self-employed people can help. I get 50% upfront on a job and I ask for an interim payment of 25% before the end of the job before getting the balance at the end. This helps manage the financial pressures a bit better."
Roger from Staffordshire says he had his first episode of depression about ten years ago, and then suffered a second episode due to long hours at work and the break-up of a relationship.
"At first my employer was understanding and gave me time off with a graduated return to work but it was too soon and I hit the bottom again. After a time, I was paid three months' salary and dismissed.
"The financial issues began to build but I was a virtual recluse unable to deal with the most basic of things. For some time, possibly a year, I really was not functioning on a 'normal' level. I took out a loan to buy a brand new van which I had no means of paying back. Eventually the van was repossessed. The pressure I was under was huge.
"Had the financial pressures been taken off me, my recovery would have been a lot quicker. If those I owed money to had backed off and given me the time and space I needed I'd still be living in my flat and no doubt would have paid off all the arrears by now.
"I'm virtually in hiding at the moment because there is no way I can pay the debts off. I plan to make myself bankrupt but am unable to save the fee. I'd say I'm 90% recovered now but it has taken around five years to get to where I am. Most days I'm fine, I'm working and holding my own but it's not easy and I fear what the future holds. I lost everything."
Who will lead the new institute?
The director of the Money and Mental Health Policy Institute is Polly Mackenzie, who was formerly a director of policy for former Deputy Prime Minister Nick Clegg and worked in No. 10 and the Cabinet Office during the 2010-15 Coalition Government.
Other trustees of the institute include retired solicitor and former Mental Health Appeal Tribunal judge Vivienne Bellau, solicitor Joanna Kay and Simi Ryatt, chief executive of Hammersmith and Fulham Citizens Advice.
The institute will also have an advisory board, bringing together people who have experienced mental health and financial difficulties, as well as leading academics and politicians such as Luciana Berger MP, shadow minister for mental health, Conservative MP Johnny Mercer and former health minister, Lib Dem MP Norman Lamb.
Ms Mackenzie says: "This is an exciting opportunity to make an impact in the lives of people with mental health problems, looking beyond treatment to the practical problems people face in their everyday lives, and helping to resolve them.
"The institute will use research and trials to identify new ways to help people with mental health problems, and then work tirelessly with everyone operating in this field to make sure those changes get implemented."
How can I get involved?