The link between money and mental health – updated September 2021

PLEASE NOTE: This blog contains information on the subject of suicide that some people may find distressing.

We know that small businesses are the backbone of the UK economy. At the Office of the Small Business Commissioner, we work hard to make sure small business owners are supported to claim payments they are owed for their work. We are aware of the mental impact poor payment practices can have on UK small business owners. Some of our case studies note the mental relief when payment is finally received. The Money and Mental Health Policy Institute supports small businesses facing payment challenges, alongside other work focusing on financial education and guidance. In spring 2021 the team at the Institute wrote a compelling blog post for us on these issues. They’ve revisited and refreshed it here.

Money and mental health are inextricably linked. We know that one in four people will experience a mental health problem in their lifetime, and of people living with mental health problems, almost one in five simultaneously experience problem debt. Sadly, our research has also shown that people in problem debt are three times more likely to have considered suicide than people who are not. This symbiotic relationship between people’s finances and their mental health is the cause of tremendous hardship for many, and operates in a cyclical nature.

Financial difficulties are a common cause of stress, and stigma around debt can mean that people struggle to ask for help and can become isolated. The impact on people’s mental health can be particularly severe if they resort to cutting back on essentials, such as heating and eating. Furthermore, common symptoms of mental health problems, such as increased impulsivity and memory problems, can make it harder to keep on top of financial management. This can then make it harder to get a good deal on energy and insurance (among other things), increasing the likelihood of financial difficulty.

How your mental health affects your income

Experiencing mental health problems can also have a significant impact on the incomes we receive. Our report from the Mental Health and Income Commission found that people who live with common mental health problems (like anxiety and depression) earn on average £8,400 less than those without. At face value, this is alarming, but the ramifications for people with these problems are complex and far-reaching. Since the beginning of the pandemic, two in five people with mental health problems have experienced an income drop, with around one in three of those having to cut back on essentials. These staggering figures should be a stark warning to all businesses and employers.

Barriers to employment and limits on job progression, ranging from direct and indirect discrimination to inflexible working practices, are a key factor driving this mental health income gap. Over two-thirds of people who requested a reasonable adjustment from their employer to support their mental health said their request was rejected or only partly met. This is the difference between someone being able to work more effectively and feeling supported, or feeling like they are not important enough to be heard and listened to, and consequently not having the opportunity to achieve their full potential.

How businesses and employers can make improvements

The good news is that there are practical steps employers can take to ensure all staff feel supported and are given the opportunity to thrive. In response to the pandemic, some employers have already begun to implement changes, most notably, a shift to remote working and offering extra support around mental health and wellbeing for staff.

However, if we are to ensure that these existing inequalities for people with mental health problems are not further entrenched by the pandemic, there are other steps that  organisations can take.

The Mental Health and Income Commission put forward three recommendations that they felt were relatively easy to put into practice and would substantially improve the experiences of people living with mental health problems in the short term:

  • Ensuring that employers support the mental health and incomes of staff while furloughed and when they return, by maintaining regular contact during furlough and routinely providing signposting to income maximisation and debt advice services when incomes are reduced
  • Providing mental health training to line managers, giving them the skills and resources to help better support employees. This has the additional benefit of creating a compassionate and kind attitude and ethos from the top down
  • Expanding on flexible working to include options such as condensed hours or facilitating more breaks by reducing lunch hours, as well as offering flexible roles from the outset.

Businesses can also have a powerful impact by how they communicate with their customers about debt. Our research revealed that in addition to long-term factors – such as persistent poverty and financial insecurity – sudden triggers like intimidating and threatening letters can contribute to people in problem debt becoming suicidal.

Today, on World Suicide Prevention Day, businesses should think carefully about their debt communications, and how they can minimise distress and support their customers. Notifying them of debt in a way that promotes help-seeking behaviour, making steps easy to understand and providing clear information about the types of help available will encourage customers to act, and hopefully less fearful of getting in touch.

While it can seem like there is a lot to do to bridge the mental health income gap, and break the link between money and mental health, some of the changes needed can be made relatively easily – and mainly require a willingness to be more compassionate towards those of us who might be experiencing mental health or financial problems.


The Money and Mental Health Policy Institute is an independent charity, committed to breaking the link between financial difficulty and mental health problems. We conduct research, develop practical policy solutions and work in partnership with both those providing services and those using them to find what really works.

 If you have personal experience of mental health problems and would like to use your voice to inform our work, find out more about our Research Community here. If you have a professional interest in our work, please get in touch at or join our Professional Network.

Leave a Reply

Required fields are marked *