Print Edition - 2019-03-06  |  The Guardian

Paying higher bills

  • Bad debt and mental health problems can be a vicious circle. Only by forcing banks to provide more help can this be addressed
- Emily Reynolds

Mar 6, 2019-

Money management is not easy at the best of times. Choosing the right deal, setting up standing orders, checking you’re not over or underpaying, switching providers—the whole thing can be overwhelming. This is doubly true for those with mental health problems—and a new report from Citisens Advice has exposed just how difficult it can be. It found that when poor mental health reduces someone’s ability to carry out daily activities, it can end up costing them £1,110 to £1,550 a year.

The reasons for this are manifold. Choosing services can be problematic—difficulty acting under pressure, poor working memory and poor response inhibition can prevent people from getting the right deal. Paying for services can be impacted by difficulties doing paperwork, and dealing with problems can be hindered by avoidance or a reluctance to communicate. This may not be the case for everyone—mental illness can manifest in any variety of ways. But inaccessible services and inadequate support are problems across the board, no matter the exact nature of someone’s illness.

The findings, though disheartening, are not altogether unsurprising. We already know that money and mental health are linked, both on micro and macro levels. Poverty, of course, is linked to mental illness in multifarious and complex ways, which is one of the reasons austerity has had such a devastating impact on the mental health of so many people. And, as the Citisens Advice research shows, it can have a significant impact on the way people manage their money on an individual level. The Money and Mental Health Policy Institute (MMHPI) points out that those in problem debt are significantly more likely to experience mental health problems; and those with existing mental health problems are also more likely to get into difficulties with money. In fact, people with problem debt are twice as likely to think about suicide as those without it—so addressing it is paramount.

So what can we do? Some banks are already taking steps to start tackling the issue, though, more often than not, they simply don’t go far enough. Barclays, for example, advises customers that they can add spending caps to accounts and note that customers can more easily check their balance on an app rather than via statements—measures that are well meaning, yes, but hardly do much to break the vicious cycle many mentally ill people are in. If you don’t want to check a paper statement because of crippling anxiety, what good will an app do? It would simply become yet another thing to ignore.

Other banks pay similar lip service to mental health—Santander suggests, particularly vaguely, that you might like to speak to one of its financial advisers. But this information is often hidden away online—you have to go looking for it. This could be helpful for someone in a more stable position, or perhaps for carers. But those in the throes of a bad episode—ie those who need help the most—could be missing out.

Banks themselves are also directly responsible for parts of this vicious cycle. As Eleanor Sharman points out in a blogpost for the MMHPI, some customers are excluded from setting up high-street bank accounts altogether—many of the poorest people in the UK use prepaid meters that don’t issue bills, meaning utility bills are out of the question when it comes to proof of address. Passports, similarly, are costly – £75.50 is a week’s income for some people. It tends only to be challenger banks such as Starling that are combating this, using video verification to check customers are who they say they are. Big banks certainly have the infrastructure to implement such alternatives—so why don’t they?

Citisens Advice also has several suggestions. It believes regulators should make it easier for mentally ill customers to exit contracts—if they are struggling to pay a bill, their tariff should be reviewed and, if appropriate, terminated. Similarly, services should not be disconnected because of late payment—payment plans should be implemented instead, or customers should again be given the opportunity to review their deal. Generic customer support—the type anybody would receive if they phoned their bank with a complaint or query—is also not enough. Specialists trained in the area should be available for anyone at any time, and information about these services should not be hidden away on a webpage nobody can find.

And there needs to be regulation. Citisens Advice points out that firms need incentives to push them into providing expanded services—incentives that are not always produced by market forces. Regulators should commit to “quick, proportionate responses” when a company’s support is inadequate—and this includes support for those with mental health problems.

No one thing is going to solve the issue of money management for those with mental health problems, and it’s important to remember that these problems are not simply personal but also structural. This is partly why it’s so important that banks and service providers improve offerings for mentally-ill customers.

But talking about these problems, no matter how awkward or anxiety-inducing it might be, is key. Helping someone get to grips with their personal finances is not going to solve institutional problems like inequality or poverty—but it could be the first step in making someone’s life significantly less complicated.

Published: 06-03-2019 09:59

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