Debtors Receiving Respite in Mental Health Awareness Week
In the last few weeks, consumers struggling with their debts have had a number of important decisions made in their favour.
First, there was the decision by the Bank of England, on the 9th May, to not increase interest rates. This will have been a welcome reprieve for millions who feared a further increase would only have added to their monthly mortgage and debt repayments.
Second, Labour MP, Luciana Berger was successful in securing an amendment to the UK Financial Claims and Guidance Act 2018, which will introduce a new breathing space scheme for debtors in England, Wales and Northern Ireland (in Scotland there is the Debt Arrangement Scheme).
The Scheme, which will protect consumers from interest and charges being added to their debt, whilst they seek debt advice, it will also allow people who are hospitalised – because of mental health problems – to receive the benefits of the Scheme without first having to attend a debt advice meeting.
Third, the UK Government has also announced it will now take steps to reduce the maximum stakes that can be made on fixed odd betting terminals in casinos and bookmakers. The terminals, which currently allow customers to bet £100 ever 20 seconds, will now have their maximum stakes capped at £2.
The importance of all of which cannot be understated in Mental Health Awareness Week.
Mental Health Awareness Week
Mental Health Awareness Week is an annual event in the UK that aims to increase understanding of mental health problems and reduce the stigma that is often associated with them.
It is believed that as many as 1 in 4 people in the UK will suffer mental health problems each year and the links between mental health problems, debt and gambling are well known and established.
For example, recent research published in the Journal of Affective Disorders shows that for every 1% increase in interest rates, there is a 2.6% increase in the incidence of mental health issues experienced by those struggling with debt.
Also research by the Money and Mental Health Policy Institute, showed last year 23,000 people in England, who were hospitalised for mental health problems, were also struggling with problem debts.
As Labour MP, Luciana Berger stated, in relation to the amendment she made to the Financial Claims and Guidance Act 2018:
“Those people are likely to be receiving calls, texts and letters from their banks, local authorities and other creditors at a time of acute distress, and they are at risk of falling into further financial difficulty as a result of increased fees and charges.”
It is hoped, although it is likely the Bank of England will increase interest rates later in the year, the new measures will strengthen the protections available for vulnerable consumers who are experiencing debt and mental health problems.
Does who you owe money to matter?
It also matters who you owe money to. HMRC, for example, have recently faced criticism for being particularly difficult for taxpayers to deal with when they are experiencing mental health problems. The Money and Mental Health Policy Institute has called for them to provide greater support. Helen Undy, of the organisation has said:
“Completing a tax return is a notoriously painful process. Now imagine what that’s like if depression makes it impossible to remember complex financial information, anxiety leaves you unable to open the post, or psychosis leaves you struggling to make telephone calls”
“It’s long been accepted that adjustments should be made to essential services to ensure that people with physical disabilities, such as visual impairments or mobility issues, get equal access. It’s about time that people with mental health problems received the same level of support.”
If you are struggling with debts, it is important to appreciate the impact this can have on you and your family’s well-being. Whether its fearing how you will make ends meet, or whether the bailiffs will come to your door, it should never be underestimated the overall, long-term impact these stresses and fears can have on you and your family’s health.
It should also not be underestimated how overwhelming debt problems can be for people who are experiencing stress or mental health problems. As Helen Undy of the Money and Mental Health Policy Institute stated, mental health problems can impair someone’s ability to remember complex financial information, deal with routine correspondence and even make difficult decisions.
The key to dealing with debt problems, however, is to not let them overwhelm you and to seek advice and assistance. A good adviser will work with you to ensure that you don’t become overwhelmed, that your information is organised and displayed in a way that you can understand, and that you make a decision that is informed and considered.
This process, the debt advice process, in itself can help alleviate a lot of the stress that is normally associated with debt and leads to mental health problems.
If you would are struggling with you finances and would like to discuss them with an experienced, friendly adviser, call Creditfix on 0808 2085 198.