The cost of living crisis in the UK is more than just an economic issue and has been at the top of our list of worries for the last couple of years. With the rapid change in the economical and political scene throughout the world, it is a mental health crisis in the making. The readers will most likely agree that the unprecedented rise in price of essentials like food, heating, electricity, water and housing, is more than worrying. Many families are struggling to make ends meet and others are not able to have a lifestyle that they are accustomed to. 

We already know from a vast number of research studies and our own experience that the stress of financial uncertainty can take a significant toll on mental well-being. It can even lead to mental ill health with anxiety disorders, depression which have become commoner since the economic uncertainty started as is the case with physical health issues including high blood pressure, heart disease and obesity. 

We already know from numerous research studies and from our direct experience at Oaktree Connect, that the stress of financial uncertainty can take a significant toll on mental well-being. For every person reading this, it’s important to recognise that ongoing money worries don’t just affect your wallet they affect your mind and body. 

Financial strain has been closely linked with increased rates of anxiety disorders and depression, as confirmed by studies such as the Mental Health Foundation’s 2022 report on financial stress and research published in the British Journal of Psychiatry. These mental health challenges are often accompanied by physical health problems too including high blood pressure, heart disease, and obesity as outlined by Public Health England and the British Heart Foundation. In short, the impact of financial stress is both deep and far-reaching.

While the financial challenges are undeniable, there are practical financial and emotional management strategies that can help manage stress whilst protecting our mental health and resilience. 

Understanding the Psychological Impact

Constantly worrying about where next month’s rent will come from and how to ensure your children have nutritious meals each day is a burden that most people find difficult to endure, both in the short and long term. This financial stress can create significant strain on individuals and their relationships, leading to heightened tension within the household. As a result, conflicts may arise, and emotional distancing among family members often becomes unavoidable.

It is not surprising that losing control over one’s finances and financial skills, along with the deterioration of loving relationships, can result in self-doubt, diminished self-esteem, and provoke a variety of negative emotional and psychological reactions, potentially leading to mental health disorders. Below are some of the most common issues that have become more prevalent.

Sleep Related Problems 

The stress and thoughts of losing financial control can make it challenging to fall asleep, as the mind often spirals into repetitive thoughts and worst-case scenarios. Staying asleep throughout the night also becomes a struggle.This leads to daytime fatigue and low energy, resulting in a reduced capacity to handle everyday life. Even the smallest of challenges may seem like towering mountains when both mind and body are weary, a truth familiar to many of us who suffer from sleepless nights. 

Anxiety Disorders

The persistent feelings of fear, loss of control over finances due to flailing economy and more uncertainty has caused a high number of adults and even children presenting with generalised anxiety and panic disorders. In the UK, an estimated 4 out of 10 women and 3 out 10 men reported high levels of anxiety in 2022/23, a significant increase from 3 of 10 women and 2 of 10 men in 2012-2015.

Depression

The persistent feeling of financial helplessness, combined with the fear of job loss and struggling to meet basic needs, can significantly impact one’s mood and diminish hope for the future. Over time, the motivation to even rise from bed may wane. Consequently, this can lead to a reluctance to socialize, even with close family and friends. This would usually be the reason why people start to feel isolated and lonely. 

Repeated episodes of depression have become commoner in those who are susceptible to mood disorders.