Martin Lewis: Launch of institute to break mental health and debt relationship

Mental health issues and debt are a marriage made in hell '“ and, worse, each feeds off the other. If you or someone you know is hit by this, you're not alone.

This is one of the biggest and most hidden financial problems affecting the UK. The more we talk about it, the better, so I want to take you through what’s happening and some tips if you’re affected.

The statistics are horrific. Here are just three of them: 1) You’re four to six times more likely to have debt crisis if you’ve mental health issues; 2) Half those seeking debt help have mental health issues. 3) The treatment time for clinical depression can be 18 months longer for those with financial worries too.

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Breaking this relationship has been a passion of mine for a long time. So having planned it for years, a few weeks ago I launched the new Money and Mental Health Policy Institute ( with a brilliant full-time team I’m funding for at least four years.

The aim of this charity is simple, to reduce the number of people affected by the issue.

And that number is huge – when I’ve written about it on social media I’ve been swamped by the responses. Here are just a couple:

“I have bipolar and was given huge amounts of credit which I spent while on a manic high. I am now in so much debt there’s no way out, which has an impact on my depression.”

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“When I’m in a depressed state I find that I can spend recklessly, without thinking about the bigger picture. Having financial struggles does make you stressed, anxious and cause sleep issues, which can then all lead to further depression. It’s a vicious circle.”

What can be done about it?

Thankfully over the past decade, the financial services sector has improved its attitude and procedures when dealing with people with mental illness once they’re already in the mire.

So the Policy Institute’s focus is prevention, to come up with solutions, research them and then lobby to get them in place.

Here’s a sample of the type of ideas we’re looking at, both are based on spending sprees, which are common with bipolar disorder and depression.

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Credit freeze. Allow people to voluntarily to put a freeze at the credit reference agencies, so they can’t apply for any new credit. To unlock it would take a set time – say 30 or 90 days – giving breathing space if your decision making ability is temporarily impaired.

High-control account options. Go abroad and debit and credit card firms freeze your accounts if they detect unusual spending patterns. Why not allow people to voluntarily apply that to all spending?

Then if unusual spending patterns happen, their card is cut off for a set time, say 10 weeks, unless a nominated trusted friend or mental health case worker agrees it should be unfrozen, because the high spend is, for example, just due to a house move.

Of course there are many other conditions too, such as dementia, which require other solutions. (Go to

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Yet that’s all in the future. If you or someone you care for has issues now, what do you do? Well my free Mental Health and Debt Booklet at takes you through step-by-step. Here are some tips from it.

1. Speak to a non-profit debt help agency. If you’re in debt crisis, then,, and especially can help – I say especially as it also does emotional counselling too.

2. Can you cut the interest rate? The lower it is the more of your repayments clear the actual debt. A balance transfer credit card can shift debt to 0 per cent for 40 months.

3. Consider informing your bank. Once a lender is aware that a customer has a mental health condition, it has to make adjustments.

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The Lending Code says banks should consider keeping a debt in-house rather than passing it to debt collectors, and they should make court action the last resort.

Though telling your bank is a decision to discuss carefully with a caseworker or debt counsellor.

4. You can’t be discriminated against for your mental health. In other words, if the fact you’ve declared your illness to a bank affects your ability to get other products with them, such as a mortgage, it would likely breach the Equality Act.

5. Know the early warning signs. Even when people plunge into debt, issues like depression don’t bite overnight. Look out for tension headaches, arguments at work, back pain or bad skin. And seek help.

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6. Banking control if you have bipolar. A few banks have minor procedures to allow you to register your mental health issues and stop your overdraft going beyond a certain amount.

Bipolar disorder sufferers, who may be prone to overspending during a manic episode, could consider discussing this with their bank. It’s worth chatting through with a debt counsellor or case worker first.

7. Consider adding a note on your credit file. If you overspend when you are unwell, you can volunteer to add information on mental health problems to your credit files in what’s called a ‘notice of correction’.

This alerts potential lenders so they don’t lend further credit. This can be added or removed whenever you want though. Yet it may stop you borrowing when you are well.

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8. Consider paying bills by direct debit. This can simplify your finances, helping to ensure bills get paid when you’re ill.

Yet while direct debits for gas and electricity bills, home phone and broadband can save you money, home and car insurers charge you interest so annual payments better.

9. Prioritise heating and eating. Don’t simply pay those who hassle you the hardest. The debt counsellors above can help.

10. There’s no such thing as an unsolvable debt. For as long as I’ve been doing my job, I’ve never once seen a debt case that isn’t solvable. It may not be easy, it may not be quick, but I want you to know it is ALWAYS doable. If you start to sort it out, it does get better.

Martin Lewis is the Founder & Editor in Chief of Money Saving Expert. To join the 10 million people who get his Martin’s Money Tips weekly email, go to