People With Mental Health Issues More Likely To Be In Poverty, Debt

In Individual, Industry News by Matthew Tagg

People with longstanding mental health problems are about twice as likely to be in relative poverty as those without such issues, a new study shows.

According to the Institute for Fiscal Studies’ (IFS) annual report, four in 10 people aged 25 to 54 with a mental health problem have an income which is less than 60% of the average, meaning they are in relative poverty. Among the same age group, 28% with a longstanding health problem are in a similar situation. In comparison, just 18% of people with no mental health issues are in relative poverty.

As a result, people in that age group with longstanding illnesses are almost twice as likely to be ‘materially deprived’ as their ‘healthy’ peers, meaning they cannot afford basic needs such as keeping up with their bills/debts and being able to adequately heat their homes.

Furthermore, the report also highlights how people with poor health are less likely to be in employment, a reality that is particularly true for individuals with mental health problems.

While around 88% of healthy people have a paid job, only 70% of people with poor health do too. However, just 53% of people with a mental health issue were in paid employment in 2016-17.

Just 53% of people with a mental health issue were in paid employment in 2016-17.Click To Tweet

Moreover, people with poor health earn less than their healthy counterparts. Median earnings for individuals in poor health are 12% lower than those of healthy people. One of the reasons for this is because people in poor health work fewer hours.

Again, people with mental health problems are associated with even worse outcomes still, with median earnings that are 23% below those of employees without a longstanding health problem.

‘A real challenge for the government’

Jonathan Cribb, a Senior Research Economist at IFS and an author of the report said: “Poor health presents a real challenge to a government looking to increase employment and living standards and control welfare spending.”

Meanwhile, a report released by the not for profit debt advice service StepChange on the same day as the IFS research shows that one in five people helped by the organisation last year had an ‘additional vulnerability’ on top of their financial difficulties.

Of the 29,500 people the charity identified as vulnerable in 2017, 43% had mental health issues, while a much lower 4.7% had physical disabilities, 4.6% had cancer, and another 4.1% suffered from some other poor health.

Together, the IFS and StepChnage report highlight just how financially vulnerable people with mental health issues are. They not only earn less, but they have more difficulty with their finances, partly because of their inability to work.

StepChange the figures in their report are “hugely worrying” and that they “highlight a clear link between falling ill and falling into debt.”

These two reports highlight a worrying trend between mental health problems and financial difficulty. At a time when people are already vulnerable, the added burden of money worries must feel insurmountable.

I have over 18 years experience in the Medical Insurance Industry, much of that spent working for Aviva Health in the Distribution team. I joined Premier Choice in 2015 and in that time I have been helping clients to develop the best possible approach to protecting their health. My understanding of how insurers work puts me in a strong position to negotiate the best solutions on behalf of our clients.