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World Mental Health Day: Is financial distress the disease we can't cure

ended 11. October 2025

Today is World Mental Health Day, but headlines won't for the most part even acknowledge it.

Against the backdrop of an economy in freefall, the reality for many people across the UK, is that money worries are the biggest threat to their wellbeing.

Research from the Money and Mental Health Policy Institute shows that nearly one in four adults say their mental health has worsened due to the cost-of-living crisis, and half of those in problem debt also report mental health issues.  Many people in problem debt report feeling suicidal and feel there is no way out.

Despite new rules on forbearance and customer care, many people still face automated letters, rigid repayment demands and cold call-centre scripts when they fall behind, piling on the stress, fear and worry.

  • Should banks, lenders and government departments be doing more to recognise the psychological toll of financial distress
  • What practical steps should institutions take to support customers before anxiety and depression take hold?
  • Are current policies helping or harming recovery for those already struggling?
  • Are debt plans sufficiently flexible to enable people time to repay?

9 responses from the Newspage community

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Patricia McGirrVerified
Founder at Repossession Rescue Network
Money worries don’t just cause sleepless nights, they cause emotional and relationship breakdowns. I’ve seen first-hand how a single missed payment can spiral into panic, shame and despair. Too many lenders still treat debt distress as a spreadsheet problem rather than a human crisis. Sending automated warnings to someone already drowning isn’t risk management, it’s cruelty by omission.

True financial recovery starts with compassion and flexibility, not red tape. If lenders genuinely want people to get back on track, they need to see mental health support as part of responsible lending, not an afterthought once the damage is done.

Most people in problem debt want time and space to get back on their feet and satisfy their responsibilities. What we need is more pragmatism and lest stigmatism in debt management.
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Kate UnderwoodVerified
Founder & Chief People Strategist at Kate Underwood HR and Training
Mental health absences are climbing fast, and too often it’s money worries pushing people to the breaking point. Employers are doing what they can — we’re seeing EAP use soar, but they can’t be the safety net for a system that keeps people in constant financial stress. Sooner or later, something has to give.
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Rob MansfieldVerified
Independent Financial Advisor at Rootes Wealth Management
Dealing with money can stressful and our education system doesn't equip people to deal with it. The Financial Conduct Authority has undertaken some positive steps with their efforts around identifying people vulnerable to making poor decisions, although vulnerable can be a pejorative term. One thing organisations should think about is speed and the haste to cut off legacy options. There's clamour to speed everything up and digitalise but it risks leaving some people behind. Something that works the majority but excludes a minority isn't progress. The proposal to close train ticket offices and force ticket buying by your phone is an example of this.
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Ben PerksVerified
Managing Director at Orchard Financial Advisers
Financial pressure can wreak havoc on someone’s mental health. The cost of living crisis has, without question, had a negative impact on the mental health of men and women in the UK. The toughest thing is, you can’t just make your income go up and your bills go down. For many working people in the uk there is a sense of silent desperation, they’re working tirelessly to stay afloat and that will have a knock on effect to mental health. What can be done? The Government need to take the pressure off households and put money back in people’s pocket, not just to boost the British economy but for British sanity too.
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Laura PurkessVerified
Personal Finance Expert at Investing Insiders
Money is one of the biggest worries in many people’s lives, and institutions like banks and the government can either alleviate some of that worry or make it considerably worse. The government has its own giant purse to worry about, but it’s evident that sometimes its concern for the bigger picture overrides concern for the individual people affected by each policy decision. The same for banks, which prioritise profits over customer health - as evidenced by the mass closure of their branches. One way banks and financial firms could help customers is by ensuring they are as easy to get in touch with as possible, and that they have real people available to quickly help with customer queries. Silence and chatbots can leave people spiralling. The government should ensure it speaks to regular people about its policies before implementing them rather than just to experts, who are often out of touch with the groups they make decisions about.
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Philly PonniahVerified
Chartered Wealth Manager and Financial Coach at Philly Financial
A client of mine, already in significant debt, recently received a letter from her bank urging her to accept an increased credit limit. This is someone who’d been making only minimum payments before starting to work with me. It’s reckless, and emblematic of how detached lenders can be from the real human impact of their actions.

When someone’s struggling, the answer isn’t to offer them more debt. It’s to pause, listen, and help them find stability. Until institutions start treating financial distress as a wellbeing issue, we’ll keep fuelling a mental health crisis that money has made worse.
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Pete MuglestonVerified
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
The cost of living crisis is putting huge pressure on people’s mental health, and an underfunded NHS simply can’t keep up. Rising debt, higher bills, and financial insecurity are pushing more people into anxiety and depression, but access to support is stretched thin. Without urgent action to strengthen both financial support systems and mental health services, we risk turning an economic problem into a full-blown public health crisis.
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Scott GallacherVerified
Director at Rowley Turton
Should the banks do more? Certainly. Will they? Unlikely. And that’s why, on World Mental Health Day, it’s vital we take steps ourselves to reduce financial stress. Living within our means, resisting the urge to keep up with the Joneses, keeping debt low, and building an emergency fund of three to twelve months’ expenses are simple but powerful ways to protect both our finances and our mental wellbeing. Financial peace of mind really is the best investment we can make.
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Colette MasonVerified
AI Ethics Consultant at Clever Clogs AI
People in financial crisis, struggling to think clearly from anxiety, are being pushed toward chatbots because real help costs too much. Yes, AI spots suicidal ideation and signposts the help available. But there are no protections for everyday mental health and money advice affecting whether you 'keep your home or feed your kids'. Institutions must provide early human contact when payments are missed, not automated letters and rigid processes that forget the scale of the human hardship.