Blog | Debt, mental health and what needs to change

16th July 2020

At SAMH, we recognise that debt can be both a cause and consequence of mental health problems. In our latest blog, our Public Affairs Assistant, Hannah Brisbane, shares some key facts on debt and mental health and what SAMH wants to see change.

Before the coronavirus, roughly one in five people in Scotland were already in some form of financial distress and as we learn more and more about the impact of the pandemic and lockdown, sadly we know that many more Scottish households will likely find themselves in difficult financial situations.

It has never been more important to understand the link between debt and mental health, so here are four key facts about this relationship followed by four things SAMH is calling for:  

1. People with mental health problems are three times more likely to be in debt than those without.[ii] Mental health problems can make daily tasks like budgeting, phoning the bank or returning unwanted items all the more difficult. During periods of poor mental health, people  may spend more as a way to make themselves feel better or because they have reduced judgement. 

2. Debt can negatively affect anyone’s mental health. As a society, we can often find it difficult to talk openly about money, which can leave people in debt feeling even more isolated.  Often these people describe feeling guilty or ashamed about their debt. These feelings, along with the stress caused by money problems, can be detrimental to anyone’s mental health.

3. Being in debt is also strongly associated with having suicidal thoughts.[iii] Debt can often make people feel trapped. Some may experience threatening letters or intimidating treatment from debt collectors which can heighten this feeling.

4. Universal Credit isn’t working for people who are in debt and experience mental health problems. In particular, the five week wait for the first payment of Universal Credit and advanced payments cause even more economic hardship for people already in precarious financial situations. Our research also shows that Universal Credit causes a great deal of unnecessary emotional distress for people with mental health problems.

Mental health and debt: what needs to change

1. The Scottish Government should stop GPs charging a fee for a Debt and Mental Health Evidence Form. Filled in by a healthcare professional, this form can encourage creditors to change the way they engage with a customer with mental health problems or even write off a debt altogether. Right now, some GPs charge patients to fill in these forms, with charges ranging between £30 and £50.[iv]

2. We want to see the expansion of the Community Link Worker programme. Community Link Workers are based in GP surgeries and offer support to local communities for non-medical issues. SAMH is calling for the expansion of this programme so more people in Scotland have access to help for managing finances, navigating the social security system and resolving housing issues.

3. The Scottish Government should amend the Debt Arrangement Scheme. We welcome the emergency measures put in place by the Government, which offer people in debt longer periods of protection against debt recovery action. But more long term action needs to happen. SAMH would  like to see the Debt Arrangement Scheme in Scotland offer greater protection for people in debt with mental health problems in the same way as the UK Government’s Breathing Space Scheme. This scheme extends this protection period until a debtor having a mental health crisis has completed treatment.

4. We are calling for real change on Universal Credit by scrapping the unjustified five week wait for the first payment. Since lockdown began, over three million people have applied for Universal Credit.[v] The UK Government should use this crisis as an opportunity to build a better social security system that supports people in financial hardship without causing any unnecessary distress – this should include getting rid of the five week wait.

While the impact of coronavirus is not yet clear, we do know the impact of increased financial instability on mental health – and we know what we can do about it.

At SAMH we believe making these changes will be vital for preventing additional hardship and protecting both financial and mental wellbeing in Scotland.

To see the full list of our debt policy asks read the full SAMH’s View on Debt.


StepChange, Scotland in the Red 2019, 2020

[iii] Meltzer, H. et al. Personal Debt and Suicidal Ideation, 2010

[iv] Money and Mental Health Policy Institute, Stop the Charge Policy Note, 2016

[v] Department for Work and Pensions, Universal Credit management information, 2020