Banks should introduce options such as voice recognition technology and web chat facilities to help customers with mental health problems avoid sliding into debt, the Money and Mental Health Policy Institute has urged.

The charity, set up by founder Martin Lewis in April 2016, has put forward new research which demonstrates how financial capability – people's ability to manage everyday financial tasks such as paying bills or budgeting – is affected by periods of poor mental health.

While support for people with physical disabilities is widely available, the institute says there's much less for those with mental health problems – even though those with a mental health conditions are three times as likely to be in financial distress.

The charity's now calling for banks to do more to support those with mental health problems, and says a few simple changes could make the difference between some customers managing well and ending up in serious debt as a result of missed payments and bank charges. It suggests banks:

  • Introduce voice recognition technology to help those who struggle to remember passwords and PINs.
  • Offer a written record of telephone conversations to ensure customers have a clear record of what was discussed.
  • Allow customers to speak to the bank via web chat or email – to help those who find it harder to interact with their bank on the phone.

See our Mental Health and Debt Help free PDF guide for more help.

What did the Money and Mental Health Policy Institute research find?

The charity's in-depth survey of peer-reviewed academic literature concluded that:

  • People with depression, obsessive compulsive disorder or post-traumatic stress disorder are likely to struggle with short-term memory. This can make it much harder to remember PINs or the details of a conversation with the bank.
  • People experiencing bipolar disorder or attention deficit hyperactivity disorder often struggle to resist impulses, and may go on dramatic spending sprees, sometimes funded by credit cards and overdrafts.
  • People with borderline personality disorder or psychosis can find it very difficult to compare options and might struggle to work out which financial products are right for them.
  • Depression, substance dependence, borderline personality disorder and psychosis can all make it more difficult for people to plan ahead, meaning customers may not understand the implications of financial decisions such as taking out a loan.
  • Serious anxiety can cause difficulty making telephone calls or opening post, making it harder to deal with financial problems and keep track of bills.

'This is not a niche problem'

Polly Mackenzie, director of the Money and Mental Health Policy Institute, said: "For too long, it's been assumed that when people with mental health problems get behind on bills, or struggle to stick to their budget, it's because they're lazy or incompetent. Our research proves beyond doubt that's just not true.

"We have assembled all the evidence to prove that mental health problems can severely affect consumers' ability to stay on top of their finances, shop around, or manage a budget. It's time for the financial services industry to adapt its services to help support people when they're unwell – just as they do to help people with physical disabilities who struggle to access a branch or engage on the phone.

"One in four of us will experience a mental health condition in any year, so this is not a niche problem: it should be core business. Today's report should be the starting gun in a new race to the top for banks, energy companies and everyone else who supplies essential services. This is a significant chunk of their market, who are currently left underserved."