How it really feels to be in debt

60 per cent of people with a psychotic disorder live in a household with an income of less than £300 per week



According to latest research from the Political Economy Research Centre (PERC) at Goldsmiths University, people struggling with large debts are more likely to suffer from depression, become sleep deprived, and in extreme cases contemplate death.

Authors of the research also found that 60 per cent of people with a psychotic disorder live in a household with an income of less than £300 per week.

The social, economic, and health problems associated with rising personal debt cost the UK £8.3bn. This puts pressure onthe country’s welfare and support services, as well as on employers and individuals. Mental health issues in particular, exacerbated by the stress and anxiety of owing money, lead to societal costs of £960m.

Despite the economic recovery, personal debt continues to be a problem for UK households. According to debt charity StepChange, 15m Britons show tell-tale signs of financial difficulty, including 6m using credit to last until payday and 3m using credit to keep up with existing credit commitments. An additional 13m people would not have the savings to keep up with essential bills for a month if their income dropped by a quarter.

According to the PERC research:

“The interconnections between indebtedness and mental health problems have been studied extensively. Individuals with mental health problems are more likely to incur debts, and in turn, having debt has a range of negative impacts on the mental health of individuals and families.”

The researchers look beyond the statistics, undergoing an exhaustive analysis of several online debt forums. These forums, according to sociologist Joe Deville, have become very useful in recent years for debtors who find face-to-face advice services intrusive. They can also help people embarrassed by their situation.

Forums like the Consumer Action Group and the Money Saving Expert pages don’t offer official advice but instead provide a space for people in debt to get informal help from other users. In their analysis of them, the PERC researchers uncovered a number of very worrying stories, such as these two:

“It’s difficult to say but I always had to manage the money my [other half – OH] was self-employed and just handed his money over to me at the end of the week, we had debts but they were manageable.

“Then the double whammy hit – I was diagnosed with ovarian cancer, it had been missed in a previous test and was now very serious, OH could not cope and left, so it was just my 19yr old daughter and 2 sons. We had very little money and only my elderly parents on pensions to help. […] I did not care, I will probably die anyway.”

“My Gran became ill, she had a series of strokes and was not able to look after herself properly. I gave up my full time job and worked part time. But there were days when she was ill I couldn’t go to work.

“I stayed at home to look after her. The debts started again, I was working 30 hours a week, looking after Gran 24-hours a day and caring for two small children. I was depressed not eating, I had to feed them before me. We were on the breadline.”

Once we move beyond the statistics, it is clear that personal debt is more than just a balance sheet problem. The pressure felt by people paying more in credit card repayments than for food can stack up. Whatever our views on how people get into debt, this research shows that debt can hold people back from getting back into the black. As one Consumer Action Group user put it:

“It’s the vicious circle, the more ill you are, the harder it is to survive financially and the worse the debt becomes then the worry makes your health worse”.

An obvious question remains – what are we supposed to do, just forgive people their debts? What message does this send out?

As Neil Davenport in Spiked last year put it:

“It is, in all fairness, usually our fault if we bugger up our overdraft and people accept their penance like fully functioning adults. After all, debt is a financial and not a mental problem. Anyone suggesting otherwise is clearly a few pence short of a pound.”

But what Davenport doesn’t recognise is that while debt is for most people a financial issue, it can quickly turn into something more. Debt on paper is just a number, but in real life it can be the difference between eating and not: this is where health problems, mental and physical, begin to occur.

So, is debt forgiveness a solution? Yes in some cases, but it can never be the only one. Community mental health services have previously experimented with peer mentoring, where former service users work with people suffering from various mental illnesses.

Debt advice agencies should look into learning from this method. Many problems associated with debt and depression are to do with embarrassment or shame, then so peer support could perhaps provide a way out.

Carl Packman is a contributing editor to Left Foot Forward and the author of Loansharks: The rise and rise of payday lending

One Response to “How it really feels to be in debt”

  1. stevep

    Household management and finance should be taught as a core subject at school, not as a qualification but to gain a lifelong skill.
    It`s unlikely anyone in the current Tory government has been in the position of losing sleep over household debt, so they don`t understand the problems ordinary citizens face, or care, judging by the welfare cuts coming.
    Compassion, advice, help and care for the disadvantaged should be the cornerstone of any decent society. The fact that this is no longer the case in the UK speaks volumes for how far our once-caring country has fallen.

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