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ombudsman news

issue 138

November/December 2016

ombudsman focus: mental health and debt problems

Following years of research into mental health and debt, the link between the two is now well-established - with half of British adults with a debt problem also having a mental health problem. But despite increased awareness, there are still significant challenges to overcome. As research by the Money Advice Trust suggests, for every person who does disclose a mental health problem to a financial business, potentially two others will choose not to out of worry and fear.

As our case studies show, we're often called to step in to individual situations where something's gone wrong because of mental health and debt problems. But of course, if people aren't comfortable engaging with businesses, they're unlikely to want to engage with us either. In this ombudsman focus, we talk with experts from across the sector about how they're making a difference - and how businesses and individuals can help people open up and get the support they need.

why did you choose to get involved in the issues of debt and mental health?

Image:Chris FitchChris Fitch, Money Advice Trust

"In 2003, I found myself sat in a flat in Brixton at midnight interviewing a man living with schizophrenia, as part of a research study. I had expected to be writing and thinking about the NHS and social care. However, the man - 'Tim' - had run up £26,000 of debt, despite not having worked for over a decade, and living on benefits of no more than £6,000 a year. I wrote about this in the Guardian and the article coincided with the publication of a new Lending Code for banks. The banking sector saw it, got in touch, and since then I haven't stopped working to help banks better support people like Tim."

Image:Mike O'ConnorMike O'Connor, chief executive, StepChange Debt Charity

"My first job was at the Department of Health working on mental health policy. It was at a time when people with learning disabilities were pushed to the edge of society, in Victorian asylums. I worked on "Care in the Community", the notion that all of us, with or without disability, live a richer life if we live together in communities. Years later, I sat on the Board of the Mental Health Foundation and although progress had been made, people with mental health problems were still not getting the support and treatment they deserved. One of the reasons StepChange Debt Charity attracted me was because of the work they had done on the link between debt and mental health problems."

Image:Caroline WellsCaroline Wells, head of customer insight at the Financial Ombudsman Service

"It's interesting to hear Chris' and Mike's defining moments. We all have them. I got involved because I've seen close-up the impact mental health can have on financial wellbeing - and just how quickly things can spiral out of control. What struck me the most were the huge personal sacrifices being made to "keep up appearances". And I kept seeing the same pattern over and over again in the people coming to us for help. That was the point where I wanted to be involved, because I knew it didn't have to be that way."

Image:Iris ElliottIris Elliott, head of policy and research, Mental Health Foundation

"I come from a working class background so I grew up in a home where there was a day-to-day awareness of needing to live on a limited budget. As a social worker I worked in areas of acute poverty and recognised the corrosive and crisis impacts of debt and poverty on mental health. Often, people living in these areas struggled to get employment and access to financial services because of people's stigmatising attitudes towards their address. They were targeted by legal and illegal money lenders because of where they lived and because lenders saw them as easy targets. Financial institutions were less likely to provide products including credit to people living in these areas. There was little choice of who to turn to, particularly at costly times of the year like the start of the school term or Christmas.

Stigma towards people I worked with also meant that they found it difficult to secure and sustain employment. Consequently they experienced the social drift that too often means that having a mental health problem leads to people being in debt and / or falling into poverty."

have people become more aware of the link between mental health and debt in recent years?

Image:Caroline Wells

Caroline Wells "That's a good question. I believe till now we've had a fairly basic understanding that debt can come about as a result of mental health issues, and that mental health issues can have a negative impact on someone's financial wellbeing. But it's only now that we're starting to scratch the surface in understanding some of the triggers for both situations."


Image:Mike O'ConnorMike O'Connor "For me, public understanding of mental health issues has improved, although the stigma remains. I would like people to regard getting help with mental health problems just as they would if they had a physical health problem.

Some creditors have made progress and are aware and supportive of those with mental health problems. Many have "vulnerable client" teams and talk to us to learn more about mental health and debt to improve their processes. "

Image:Bob WinningtonBob Winnington, executive officer, Money Advice Liaison Group

"Over the past decade the profile of a whole range of mental health problems has been raised in part by press coverage and the support, and willingness to speak up, of those in the public eye.

Members of the Money Advice Liaison Group (MALG) - debt advisers and creditors - recognised 10 years ago that the increased incidence of personal debt could, to some extent, be reciprocally linked to mental health problems. Since then, they've rolled up their collective sleeves and determined to make a difference in this area.

As a result, where MALG's debt adviser members were previously greeted with brick walls when trying to get help on behalf of mentally ill and vulnerable clients, creditors are now very aware and committed to helping those customers. "

do you think there are any key factors that push people in debt towards mental health issues, or vice versa?

Image:Mike O'ConnorMike O'Connor "Debt and mental health are linked and it's not always possible to disentangle the two.

Dealing with debt can be an exceptionally stressful experience. Debt still carries a stigma which can exacerbate existing problems of low self-esteem. The pressure to pay bills, dealing with debt collectors and facing threats of enforcement can make matters even worse, leading to anxiety and mental health difficulties. People with pre-existing mental health conditions may be unable to manage their finances, and debt can be the result. Our personal relationship with money can be extremely complex and deeply rooted in our psyche."

Image:Caroline WellsCaroline Wells "That's absolutely right. And the change in our relationship with money is a major factor. For one thing, we don't really get to see the money we spend anymore. You can pay for almost everything electronically these days, and that means we've lost that natural connection we used to have of physically seeing how much something cost before we handed the cash over. That loss of connection can be a real issue for people when it comes to registering how much they've been spending."

Image:Chris FitchChris Fitch "Personally, I prefer to think about this in terms of interventions and solutions, rather than there being one key problem or factor. The focus of our research and training is on what financial services are well placed to support. Initially, our team at the Money Advice Trust has looked at debt collection practices, with an emphasis on how 'recovery' can not only mean "getting back what is owed from a customer", but also helping customers living with mental health problems to re-establish their finances, personal wellbeing, and a sense of hope for the future. More recently, we've started to also look at credit provision and lending, and how customers who might be in a vulnerable situation can be identified and supported."

it's clear things have been changing - but do you think there are still barriers that prevent people getting help?

Image:Iris ElliottIris Elliot "People who experience mental health problems often have disrupted education and employment histories. Without support to recover and get back on track in a timely way they may not reach their earning potential, they may be stuck in insecure and low-paid jobs and their cost of living may be more expensive. When they're unwell they may end up spending excessively or struggle to keep up with paying bills. If they have substantial debt this is an additional barrier to recovering their mental health. Clearly, being in unmanageable debt is exceptionally stressful.

It's important to see this as a systemic and societal issue so that we don't only focus on the individual or household. As well as factors to do with individual experience, there are public policies and institutional practices that could alleviate individual and family distress."

Image:Bob WinningtonBob Winnington "From my experience, there is an understandable reticence by some customers to share personal information around their mental health. People are rightly concerned that a revelation of a condition such as bipolar or depression could have a detrimental impact on their future dealings with financial organisations: admitting to a mental condition could stop them doing the kinds of things other people take for granted, such as taking out a personal loan or a mortgage, or even getting a credit card."


Image:Mike O'ConnorMike O'Connor "Getting debt help can be a big step for anyone - half of our clients wait over a year between worrying about their debts and getting debt advice. People worry but do not take action and problems mount. For those with mental health issues, it can be even more difficult. The stigma around debt - including the detriment Bob mentioned - needs to be tackled, and for many people they simply don't know where to turn for help and support."


Image:Caroline WellsCaroline Wells "Part of overcoming that stigma is about asking for help. Easy to say, harder to do. People have an in-built drive to stay in control - or at least being seen by others to be in control. And of course, mental health plays a key role in how resilient someone can be in that situation. But there's also the fear of what will happen if they admit they're struggling. Will other people treat them differently? Will they lose the job they rely on? Will they lose access to services because others deem them incapable? Will they actually get the support they need? Until these fears are openly dispelled, they will always be there - whether they are 'true' or not."

so in the face of these kinds of problems, what can financial businesses do to help people?

Image:Mike O'ConnorMike O'Connor "Financial businesses need to continue the progress they have been making in mental health over the last few years, ensuring that their "vulnerable client" policy is more than a piece of paper and that staff are appropriately trained and rewarded for taking the right action. It's essential that businesses show forbearance and offer the right assistance to people with mental health issues.

At StepChange, we are happy to share our processes and to work with firms and we hope they continue to work with us."

Image:Bob WinningtonBob Winnington "One of the key tools developed by MALG is the Debt & Mental Health Evidence Form, currently on its third version. This form can be used by healthcare professionals, debt advisers and creditors to evaluate a debtor's circumstances more effectively. It provides a standardised approach to the provision of information and gives a clear picture allowing creditors to arrive at informed and appropriate decisions. The form has been working well and has been used effectively in a number of sectors for many years."

Image:Caroline WellsCaroline Wells "Over the last few years I've seen financial businesses make huge strides in helping people in trouble, and wanting to understand what they can reasonably do to help. But they still need to think about how they can create an environment where their customers can get in touch in a variety of ways to talk about things.

For me the most important thing is for businesses to step in earlier, before the crisis point, so people don't have to raise their hand before they get help. And if their customer has multiple problems, financial businesses need to work together alongside other agencies to get the customer the all-round care and support that they probably need. This is something we've been doing for a number of years now for people coming to us. If we didn't, we'd have just been using sticking plasters to try and cover a large wound."

Image:Iris ElliottIris Elliot "Financial businesses can review their policies and practices to identify ways in which they can support customers with existing mental health problems, or those who are likely to be at risk - for example people who have become unemployed or experienced a relationship breakdown. Ideally, this is about preventing mental health problems developing or escalating into a crisis. Identifying and supporting customers early will head off many difficulties, build customer loyalty and cement the reputation of the business.

Businesses can also learn a lot from promoting the mental health and wellbeing of their own staff. This can lead to significant culture change and benefit for customers as well as employees."

and what advice would you give to someone who's struggling with debt and mental health issues?

Image:Chris FitchChris Fitch "Firstly, to recognise that it's not too late to make things better - even if it feels that way. Secondly, to call someone who will help - like a free advice agency. They are brilliant at what they do. If you are upset, distressed, can't think straight, don't hesitate to also call the Samaritans. They are there for anyone who is emotionally distressed. And do see your GP - they will also be able to help with how you're feeling. More information can be found here.


Image:Iris ElliottIris Elliot "I echo Chris' comments: don't feel that you are alone or struggle in silence. Reach out to people close to you: friends, family, and the health and social care professionals with whom you are in contact. If you don't want to talk with someone you know, then you can get good, confidential support from free advice services who will help you through this. This won't go away without taking that first step. But it can get sorted out - and it's best to start sorting it as soon as possible.

It is necessary to give a clear message of hope when people are feeling overwhelmed, sometimes crushed by debt, and don't think they will ever find a way through to the other side."

Image:Caroline WellsCaroline Wells "My advice would be: please don't sit in silence, and please don't try to cope on your own if you're struggling. You don't need to do that. As Chris says there are some fantastic free advice agencies out there. It's an easy thing to say, but hard to do. But if you do one thing, talk to someone. They can help you take that first step."


can you tell us about any upcoming work you'll be doing in this area?

Image:Bob WinningtonBob Winnington "There is still a lot of work to be done. We need to recognise that the challenge is far wider than just mental health. People become vulnerable for all sorts of reasons - long-term illness, gambling, alcohol, job insecurity, relationship breakdown, homelessness and bereavement must all be considered in a more holistic way. Over the coming months MALG will be considering how to identify and grasp opportunities for collaborative working with a view to coming up with flexible, practical and pragmatic solutions."

Image:Chris FitchChris Fitch "We're currently running a new piece of research which is looking at the experience of staff in financial services firms when collecting debts from people with mental health problems - or providing credit to customers where there might potentially be a difficulty with decision-making due to a mental capacity limitation.

We're looking at this from the perspective of the financial services firms, and the staff working within them. The research is funded by the Finance and Leasing Association and The UK Cards Association, involves up to 50 firms, and will report in two parts, with the first report on debt collection due in early 2017."

Image:Mike O'ConnorMike O'Connor "We continue to work with organisations like the Mental Health Foundation and Mind to ensure that our teams provide the best possible support for people with mental health issues. We employ 1,500 people and we encourage our staff to tell their own story of mental health issues to encourage other colleagues facing similar problems to seek help. I am extremely proud of my colleagues who have the courage to put their hand up and say "it happened to me" and inspire others to take action."

Image:Iris ElliottIris Elliot "We're continuing to share the Mental Health Foundation's report on Poverty and Mental Health, which was funded by the Joseph Rowntree Foundation (available here).

Our research team prepare a wide range of free information about looking after your mental health to help people manage the difficult situations (available here), and we encourage colleagues in financial and advice services to share these widely."

one final thought you'd like to add?

Image:Caroline WellsCaroline Wells "It's been really encouraging to hear everyone's thoughts and plans for the future. We'll keep sharing what we're seeing and encouraging fairness - in ombudsman news and wider discussions that are happening in financial services, and also in those conversations that we're having every day in resolving individual complaints."


Image:Chris FitchChris Fitch "Awareness alone will not address the relationship between mental health and debt problems. We are now seeing practical change in financial services in response to this issue, and we need to see this happen to the same degree within debt advice and also the NHS and social care. After all, the relationship between mental health and financial difficulties is even woven into the fabric of our bank notes. Winston Churchill on the five pound note, Charles Darwin on the ten, and James Watt on the fifty, all lived with mental illness. Therefore every time we use money, there is a stark reminder literally staring us in the face about this relationship with mental health, and we really, really need to translate this awareness into action."

Image:Money Advice Trust

The Money Advice Trust operate a programme of training, organisational change, and consultancy on vulnerability, financial difficulty, and financial services. This has involved introducing change, knowledge and skills programmes to over 200 different organisations and 5,000 frontline staff, with this work spanning the creditor, retail, energy, enforcement, and local authority sectors. The Trust have also produced e-learning and face-to-face training courses, and have collaborated on award-winning research and publications on vulnerability.


The Money Advice Liaison Group (MALG) was set up as a forum working for greater and better communications, best practice, understanding and professionalism among those organisations with an interest in personal debt. MALG's members are Debt Advice Professionals and Creditor organisations.

Image:StepChange Debt Charity

StepChange Debt Charity provides free and independent debt advice by telephone and through its online Debt Remedy tool and is contacted by over half a million people every year. The charity's vision is a society free of problem debt. Their ethos is founded on helping people to repay their debts where they are able to do so. Where people cannot, they provide advice including, where appropriate, supporting people through insolvency processes.

Image:Mental Health Foundation

Iris Elliott leads the Mental Health Foundation's policy and research work across the UK and with international partners. She is a Fellow of the Royal Society of the Arts in recognition of her "exceptional and longstanding commitment to improving public mental health in the UK and Ireland". Iris has worked as an adult mental health social worker, health promotion specialist and a national and all-Ireland policy adviser in mental health, disability and public health organisations.

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ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.