A consulation to find ways of supporting shoppers who financially overstretch themselves due to mental health conditions has been launched by a charity set up by MoneySavingExpert.com founder Martin Lewis.
The Money and Mental Health Policy Institute has today announced its first major consultation paper, with proposals including a 24-hour window to review expensive purchases.
The charity is calling on retailers, financial services workers and those in the mental health profession to respond to proposals in the 'In Control' paper, which are designed to help people struggling with conditions such as depression to stay in control of their finances.
The proposals outlined in the Money and Mental Health paper include:
- The introduction of a 24-hour window to review expensive purchases.
- The setting up of daily spending limits.
- The option of involving a trusted friend in managing your finances.
The launch of the consultation paper comes hot on the heels of research conducted by Money and Mental Health, which showed 93% of 5,413 people who identified themselves as having experience of a mental health problem spend more when they're unwell.
See our guide for more information about mental health and debt.
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What else does Money and Mental Health's research show?
The charity ran two surveys – the first showed that 88% of those with experience of a mental health problem were at least two months behind paying their bills (5,413 people were polled in this survey, between 4 March and 15 April this year) .
Of those surveyed, 53% claimed they have bought goods on instalment, hire purchase or credit sale agreement in the last 12 months alone.
Meanwhile, a second online survey (which took place between 1 and 5 July and received 257 responses) showed that 80% of those polled thought online shopping was particularly hard to resist.
This second survey also showed that 40% found buying goods on instalments from mail order catalogues was the most compelling form of credit.
How can our mental health affect our spending?
Elsewhere, Money and Mental Health's research shone a light on six different ways our mental health impacts our spending:
- Manic spending – during a high or period of mania.
- Nihilistic spending – where the transaction, or life itself, is considered meaningless.
- Comfort spending – to boost low mood.
- Social value spending – to boost status or self-worth by giving money or gifts to others.
- Impulsive spending – where we can't attribute any purpose to the transaction.
- Addictive spending – to feed an addiction, like alcohol or gambling.
What do the experts say?
Martin, who is chair of the Money and Mental Health Policy Institute, says: "The relationship between money and mental health is toxic. Every day I hear from people who struggle to control their spending in periods of poor mental health.
"While there is general demand from consumers for everything to get faster and easier – including shopping and accessing credit – for those with mental health conditions that make them prone to crisis spending, this can be dangerous. Money and Mental Health is looking at policy solutions to add 'friction' to the system – to try to help impulse control.
"We've already looked at mechanisms for self-restricting access to future credit. Now we're adding potential spending controls too, such as a 24-hour window to review high-cost purchases, setting daily spending limits, or being able to involve a trusted friend in managing your finances."
Polly Mackenzie, director of the Money and Mental Health Policy Institute, adds: "Increased spending is a symptom of a number of mental health problems, but that doesn't mean that those living with them should be written off to a life of financial difficulty.
"Today we invite retailers and those working in financial services and mental health to join the conversation, to respond to our ideas and to show their commitment to a retail and financial environment that helps people to stay in control."
Where can I read the full consultation paper?
The 'In Control' consultation paper is available online. The deadline for responses is 10 October 2016.