Recession fears causing debt depression

Debt is a significant factor in depression – with 91 per cent of those with debts saying their mental health deteriorates.

Furthermore, data from mental health charity Mind show those with mental health problems are three times more likely to be in debt – as factors such as low income and not being able to work because of the stigma of depression compound the problem.

The charity found of those with debt problems, 71 per cent ran out of cash every week or most weeks, while 87 per cent relied on credit to pay for food and everyday expenses.

Over half of those with debt problems had gone without food or heating.

Mind chief executive Paul Farmer said: "UK personal debt stands at a staggering £1.4 trillion but the real cost here is that on our mental health.

"Money worries aren't just keeping people awake at night; they are causing high levels of stress, depression and in some cases self harm and suicidal thoughts. At a time when people across the country are anxious about their finances, debt-depression is a real and growing concern."

He added people living with mental health problems are particularly vulnerable to being trapped in a cycle of debt and poverty.

"Those on lower incomes are also more likely to only be able to get credit from lenders who charge astronomical interest rates," Mr Farmer said.

"This is a worrying trend as people are left facing a debt mountain that they have no means to repay."

Mind is now calling for bank and debt-collection agency staff to receive mental health awareness training.

In the case of those with bipolar disorder – where the condition can cause sufferers to spend extravagantly during a manic phase – banks are being urged to monitor erratic spending. Those with the condition are four more times likely to be in debt.

"Changes in practice such as waiving fees when a customer has been too unwell to manage their finances and introducing mental health awareness training for bank staff will make all the difference," explained Mr Farmer.

"Creditors have a duty to help not hound their customers, especially when they are coping with serious health problems."

Lesley McLeod at the British Bankers' Association (BBA) explained banks now have a duty to be sympathetic as possible in the way they treat people suffering from debt problems.

"Banks treat people with mental health problems and who cannot work in exactly the same way as those with physical impairments. To help they can restructure debts, offer payment holidays or suspend interest in products such as overdrafts," she said.

Ms McLeod added some banks are now training staff in mental health issues, as well as monitoring erratic spending, and people are becoming more open about telling their banks about mental health problems.

Martin Lewis, finance expert, said: "Severe debt isn't just a financial problem. It causes relationships to break up, people to lose their homes and families to break down.

"No matter who you are, it can send you to the pits of despair. There is a clear correlation between those in debt and those with mental health problems. Most people have either had issues themselves or have a family member who has. This is a growing blight on our society and one we have to tackle."

Mind has now launched a new section on its website with help and advice for those with mental heath and financial difficulties.

Daniel Barnes