Money Matters: Why Poor Finances Can Lead to Poor Mental Wellbeing

10.10.2019 by Jim Ker

Pounds. Whether too many or too few, they can alter our mood – and not always for the best.

Think about that time you tentatively stepped on the weighing scales after two weeks of overindulgence on your all-inclusive summer holiday. It’s likely that more pounds than you were expecting made you feel less than happy about the number staring back at you on the digital reading. We’ve all been there.

The fact is, a seemingly innocent figure – whether on the weighing scales or your bank statement – can change more than just your day, it can change your mindset.

We’ve all experienced a similar level of horror when we’ve checked our online bank account after a heavy weekend of spending, too. So, it’s absolutely no surprise, then, that finances, or lack thereof, can be linked to our mental wellbeing.

Financial Anxiety

It’s a fact The Independent reported last year, stating that half of UK Britons ‘fear for their mental health as figures show rising personal debt’. An increase in County Court judgements is a sign of financial anxiety reaching ‘alarming levels’, says the piece, with individuals ‘struggling to keep debt from spiralling’.

The iNews site backs up these stats, with a survey of more than 2,000 adults (conducted by TopCashback) stating that more than half of UK adults say their financial wellbeing has affected their mental or physical health in the past. Staggeringly, 35% of those added that they suffer from money-related anxiety ‘regularly’.

The latest figures from the Office for National Statistics support this fact – but while measures of people’s money-related anxiety reached a three-year low in 2018, there are still some 10.3 million people (a fifth of the UK’s population) reporting high-anxiety when it comes to all things money.

Is ‘Fear of Missing Out’ to blame?

So, why are people getting into debt in the first place? The iNews piece suggests the housing crisis could be just one reason. The fear of missing out (FOMO) could be another – a subject we explored recently, here in another recent blog post.

By using ‘small stepping stones’, people can re-learn good habits and get back on track, says TopCashback’s UK director, Adam Bullock – and it’s a sentiment we echo here at Kingston Unity.

“A lot of people can feel out of their depth when trying to build their financial wellness, especially if they’re struggling with a lot of debt, don’t know where to start or feel the road is too long,” says Adam, before encouraging people to stick to a daily budget and be more savvy about their spending.

The Guardian joins the conversation on finances and mental wellbeing, suggesting that those suffering from stress and anxiety are three times more likely to be in debt. Forty-four-year-old James McNicol is just one person who sees fluctuations in workload and cashflow, states the piece.

‘Over the past five years, he has built up significant debts. During quiet periods McNicol worries about money, which has a knock-on effect on his sleep and mood.’

Getting back on track

Having been diagnosed with anxiety and depression, James has since sought help to get his finances back on track – and it’s something The Guardian advises anyone else in his situation should consider, by pointing people in the direction of various helplines.

The National Debtline – on 0808 808 4000 – is just one support system for those who are worried about declining mental health in relation to money worries, with Citizens Advice (on 03444 111 444) being another.

By talking about your money worries, you may also be able to devise a plan to get back into the black in terms of your finances. The NHS site offers some help for anyone who’s feeling worried, stressed or anxious about their current financial situation, with tips on sticking to your normal routine and cutting down on alcohol amongst the advice.

Meanwhile, the charity Mind has a Money and Mental Health section on its website, which includes advice on how to manage debt.

Save for a Healthier Financial Future

How do you begin to save, then, when debt is an issue? The Insider weighs in on the subject, saying that, in most cases, ‘financial experts say you should still be saving even if you’re in debt’. Of course, there are a host of ways you can do this, says the site, with refinancing your student loans being just one.

Savings and investment products from Kingston Unity Friendly Society are designed to help you save for a rainy day, too, with options including Investment ISAs and Tax Exempt Savings Plans. The latter helps you squirrel away as little as £15 per month tax-free in addition to your annual ISA allowance. You can also choose to benefit from life cover during the term of your plan.

Have any questions about any of your plans? Do not hesitate to get in touch with our team here.

Please Note: You must confirm you have read the key facts, before downloading this document.

Key Facts about our services and costs

1. The Financial Conduct Authority (FCA)

The FCA is the independent watchdog that regulates financial services. This document is designed by the FCA to be given to consumers buying certain financial products. You need to read this important document. It explains the service you are being offered and how you will pay for it.

2. Whose products do we offer?

We offer products from the whole market

We only offer products from a limited number of companies

We only offer our own products

3. Which service will we provide you with?

We will advise and make a recommendation for you after we have assessed your needs.

You will not receive advice or a recommendation from us. We may ask some questions to narrow down the selection of products that we will provide details on. You will then need to make your own choice about how to proceed.

We will provide basic advice on a limited range of stakeholder products and in order to do this we will ask some questions about your income, savings and other circumstances but we will not:

  • conduct a full assessment of your needs;
  • offer advice on whether a non-stakeholder product may be more suitable.

We can only offer products from Kingston Unity Friendly Society. These products will enable you to:

  • protect yourself and your loved ones in the event of death
  • save and invest with the added benefit of protecting yourself and your loved ones in the event of death
  • provide benefit cover in the event of sickness

4. What will you have to pay us for our services?

Normally, if you buy a financial product direct from us, there will be no payments such as commission or fees payable. If there are any commission or fees payable, we will tell you how we get paid and the amount before we carry out any business for you.

5. Who regulates us?

Kingston Unity Friendly Society, 9 Navigation Court, Calder Park, Wakefield, WF2 7BJ is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and .the Prudential Regulation Authority. Kingston Unity Friendly Society’s FCA Registered Number is 110056.

Kingston Unity Friendly Society permitted business is advising and arranging life assurance and pensions business.

You can check this on the FCA’s Register by visiting the FCA’s website www.fsa.gov.uk/register or by contacting the FCA on 0845 606 1234.

6. What to do if you have a complaint

If you wish to register a complaint, please contact us:
…in writing Write to Kingston Unity Friendly Society, Complaints Department, 9 Navigation Court, Calder Park, Wakefield, WF2 7BJ. …by phoneTelephone (01924) 240164

If you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service.

7. Are we covered by the Financial Services Compensation Scheme (FSCS)?

We are covered by the FSCS. You may be entitled to compensation from the scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim.

Most types of insurance business are covered for 90% of the claim with no upper limit.