Debt and its consequences for health

Debt is not only a financial problem. As it grows, it strains relationships, affects living standards and causes ill health. Over time it infiltrates every aspect of life, becoming an inescapable nightmare. The impact of this is felt not just by the individual, but problem levels of debt have a much larger social implication as well.

Poor health, both mental and physical, can impact employment, increase expenses, reduce capacity to manage finances and heighten reliance on public services. Therefore, it is not surprising that those with ill health, or who care for loved ones, are more likely to face financial hardship. Understanding this intrinsic link adds an extra dynamic to the collections process and providing debt advice.

Christians Against Poverty’s (CAP) new client report released today shows that mental ill health affects two fifths of people in financial difficulty, preventing them from engaging with their financial situation, and needing extra support in their journey out of debt. Most commonly this includes depression and anxiety, which directly impact day-to-day engagement with creditors, debt advisers and society as a whole to the point where three quarters of CAP clients were afraid to open the post and one in five would not leave the house before receiving debt help.

Long-term illness and poor physical health also have direct financial consequences. Almost a fifth of CAP clients were pushed into the red because of hospital costs, which included parking, prescriptions and equipment. These costs are often unavoidable and can have serious implications on family finances and wellbeing.

It is not only those with health problems themselves struggling financially, but also those who care for loved ones. One in five clients had found caring responsibilities had led to debt, and of these, 58% had found it to be a significant cause. Often caring can become a full time job, and can create a substantial strain on finances over the long term. Sadly, it was also found that one in ten CAP clients (10%) had incurred debt paying for a funeral.

One CAP client, Rebecca, was hit in all three of these ways. As a young adult, she faced a series of family bereavements leaving her alone and in debt. When her aunt was taken into hospital Rebecca went to visit; each time the trip cost her a total of £50 – covering travel, parking, childcare costs and loss of wages. Her aunt sadly passed away and the added stress of debt caused severe depression. Rebecca thought many times about ending her life.

Rebecca’s story clearly shows how the causation between debt and ill health flows both ways. The good news is that following debt help both finances and health improve. 46% of CAP clients are less reliant on medication and almost two thirds feel well enough to return to work following help. Debt and health are so meticulously interlinked that rectifying one will help rectify the other, which is why debt advice is such an integral service for those in financial hardship.

Dawn Stobart, Director of External Affairs, Christians Against Poverty (CAP)