Warning: This Insight discusses suicide.

Monday 10 October is World Mental Health Day. According to the independent Mental Health Taskforce, in England one in four adults experience at least one diagnosable mental health problem in any given year (PDF).

This Insight looks at how rising cost of living could affect the population’s mental health.

Can social and economic circumstances affect mental health?

While some people might have a genetic predisposition to mental illness, biology isn’t the only factor that shapes someone’s mental health. The conditions people are born into, grow up and live in also affect their mental (and physical) health and are known as the social determinants of health.

Health and socioeconomic positions exist on a gradient, and the least well-off in society face the worst health outcomes while the most well-off have the best. This means social inequalities produce health inequalities.

How does financial security affect mental health?

Our mental health can change depending on our financial situation and it’s thought this relationship works in both directions:

  • Suffering financial losses or living in poverty can worsen mental health.
  • People with mental health conditions may end up in poverty or suffer financial loss because of their illness, for example, if they are not able to work.

The dual nature of this relationship means people can find themselves in a downward spiral of financial problems and poor mental health. Financial difficulties and problem debt are also associated with suicidal thoughts and dying by suicide.

How does money shape the social determinants of mental health?

Financial troubles can cause chronic stress and reduce healthy choices in other areas of life. This means the effect of increasing living costs is not limited to anxiety over what someone can afford, it can lead to decisions such as limiting socialisation or overworking.

Housing instability is associated with insomnia, stress, anxiety and depression. People with mental health conditions are also more likely to live in rented and poor-quality housing than the general population, which can exacerbate existing issues.

Fuel poverty (when a household cannot afford to heat their home adequately) is associated with poor maternal mental health, as well as other factors, such as lack of transport to socialise and attend appointments.

The potential effects of the rising cost of living are not limited to those who pay the bills. Children in poverty are at a greater risk of experiencing adverse childhood experiences. Experiencing four or more adverse childhood experiences is strongly associated with mental ill health as an adult (and is linked to greater risk of other issues, like substance misuse).

What do we know from past economic events?

Studies of the 2008 economic recession, such as the Young Foundation’s Receding Tide report and analysis by the World Health Organization (PDF), reported a negative effect on mental health in the UK and globally. In England, the 2008 economic recession was associated with increased male suicide in the general population and among people with existing mental health problems. Middle-aged men were found to be most at risk.

More recently, research during the Covid-19 pandemic found that 44% of adults with mental health problems in the UK who fell behind on bills either considered or attempted suicide.

Calls for more support

In August 2022, an open letter signed by Mind and 16 other mental health organisations called on the future Prime Minister to learn from the impact of previous economic recessions on mental health, by supporting people on the lowest incomes.

The Royal College of Psychiatrists have asked for a “cash boost” to match inflation, warning of a “threat of pandemic proportions to the nation’s mental health”.

The British Association of Counsellors and Psychotherapists (BACP) has reported the rising cost of living is already affecting the population’s mental health. In a survey of BACP members, 61% of therapists reported their clients are anxious about affording household bills, 52% said their clients are losing sleep over the issue and 49% said clients are cutting back on meaningful activities, such going to the gym.

What has the Government said?

In July 2022, the Secretary of State for Work and Pensions, Chloe Smith, said “no specific assessment has been made on the impact on the mental health of people receiving benefits of the recent increase in the cost of living.” The Minister said specialist employment support is available for people with mental health conditions, including the Employment Advice in Improving Access to Psychological Therapy (EAs in IAPT) service and the Access to Work Mental Health Support Service.

The Government said it “understands the pressures people are facing with the cost of living and has taken further decisive action to support people with their energy bills”, including through the Energy Price Guarantee and the Household Support Fund.

When questioned on support for people in debt, the Government said it “continues to maintain record levels of funding for free-to-consumer debt advice in England in 2022-23, bringing this year’s debt advice budget for [the Money and Pensions Service] to over £90 million.”

In April 2022, the Government published a discussion paper to support its commitment to develop a new cross-government 10-year plan for mental health and wellbeing for England.

The House of Commons Library has a collection of research and information on the increasing cost of living and inflation.


About the author: Katherine Garratt is a researcher specialising in mental health at the House of Commons Library and is a Registered Mental Health Nurse.

Photo by Jan Antonin Kolar on Unsplash

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