The Money and Mental Health Policy Institute – what’ll it really do?

A month ago I announced I was founding the new Money and Mental Health Policy Institute. It has just gained charitable status, and as this is Mental Health Awareness Week, I wanted to explain more about it. The article below is primarily one that was first published in The Telegraph on the launch of the institute.

Debt and mental illness are a marriage made in hell. 1) You’re four to six times more likely to have a debt crisis if you’ve mental health issues; 2) Half those seeking debt help have mental health issues; 3) The treatment time for clinical depression can be 18 months longer for those with financial problems too.

The two feed off each other. Debt crisis can trigger clinical depression, anxiety attacks and more; mental illness can build debts. Breaking the link would help individuals, the NHS and the economy. Yet many who admit to me they’re affected by this union think they’re alone. Actually it’s so common, it’s ordinary.

Mental health is a spectrum. Everything from borderline personality disorder to dementia or just plain grief. All can impact our ability to make decisions. My hope is that within a decade, when someone is getting a credit card and they choose to mention they have, say, bipolar spending sprees, without fuss the bank simply says: “We’ve a number of different control options you may like”.

While I don’t have a clinical condition, like millions across the UK, I’ve had some very dark days. During one of the worst of those, where I struggled to cope with leaving the house – I felt so fortunate that I wasn’t paid by the hour and struggling to make ends meet, and could take a little recovery time. That was the day I promised myself to try to do something for those without that luxury.

This is more than a financial issue

Debt counsellors CAP UK report 17% of their clients have tried to take their own life. When I’ve written about it on social media I’ve been drenched with responses. Here are just a couple…

I have bipolar and was given lots of credit which I spent while on a manic high. I am now in so much debt there’s no way out. Money worries continue to hamper my recovery.

I’ve been in the circle of hell for 20 years. The illness makes dealing with it difficult. Talking to aggressive strangers only interested in being paid becomes too much so you avoid it and the debt doubles with interest or fines. You stop opening post so they knock at the door, so you stop answering the door. Next thing you’re a prisoner in your own home. One period of illness leaves financial scars with you every day.

For practical help if you’re struggling, see my free Mental Health and Debt help booklet.

Helping people when they’re in control, to protect themselves when they’re out of control
Thankfully over the last decade, the financial services sector has improved its attitude and procedures when dealing with people with mental illness once they’re already in the mire.

So what I want the new Money and Mental Health Policy Institute to do is to focus on prevention. Very deliberately this isn’t a ‘help to consumers in trouble’ charity, that would be a sticking plaster. More fundamental change is needed. It’s a bold ambition to influence the way products are designed not just in finance but any sector which leaves people in debt – from mobile phones to energy bills.

Nor is it a think tank – I don’t give a monkey’s about research for research’s sake. The aim is to invent practical solutions and then get practical change. It’ll be run by the brilliant Polly Mackenzie, a former policy chief and No. 10 special adviser, and a team of policy and academic researchers. I’m providing funding for at least the first four years (for transparency’s sake that’s a minimum donation of £2.1m overall).

Unapologetically we’ll start with low hanging fruit to prove our worth – like these two totemic ideas we’ll be researching. They’re based on controls you can put in place to protect yourself from fraud, used to protect yourself from yourself. This should help individuals and lenders too as if it prevents bad debt, they gain.

  • High-control account options. Go abroad and debit and credit card firms freeze your accounts if they detect unusual spending patterns. Why not allow people to voluntarily apply that to all spending?

    Then if unusual spending patterns happen, their card is frozen for a set time, say, 10 weeks, unless a nominated trusted friend/mental health caseworker agrees it should be unfrozen, for example, as the high spend is ‘just due to a house move’.

    While particularly powerful for those with depression- or bipolar-triggered spending sprees, anyone should be able to use it. As former No. 10 head of policy Paul Kirby (one of our trustees) says: “Don’t add the stigma of calling it a mental health protection, instead just a high-control option”.

    Yet there are challenges to making it happen – not least that ‘trusted person status’ simply doesn’t exist in regulations (not without the huge rigmarole of a lasting power of attorney).

  • Credit freeze. This would allow people to choose to lock their credit file so they can’t apply for any new credit. Unlocking would take a set time – say, 30 or 90 days (research is needed) – affording breathing space to allow things to calm down before you’re locked in to debt.

Of course better and quicker treatment times would help too. After all if someone breaks their leg, within a few hours they’re in hospital. They may lose some income, but quickly things get back to normal.

Yet with a mental health breakdown, it can be 16 weeks before an appointment. Meanwhile, they may lose their job as they’re not able to cope with telling work why they’re absent; and as mental health hits your decision making ability, many people simply don’t deal with their finances. After 16 weeks, this can have a catastrophic financial impact, irrecoverable for years.

It’s time we changed this.