The UK is now nearly two years into a period of painfully high inflation. And while this has fallen from its peak in October 2022, we continue to be affected by the high costs of essentials. The mental health impact of increased costs has been widely felt and is likely to cast a long shadow on some people’s finances.

This is the first of two papers funded by abrdn Financial Fairness Trust, in which the Money and Mental Health Policy Institute explores the psychological harm caused when people fall into arrears and how debt collection practices can reinforce that harm. This paper focuses on six popular consumer credit products: credit cards, store cards, buy-now-pay-later products, unauthorised overdrafts, personal loans and payday loans. The second paper in 2024 will take a broader view of debt collection practices from a range of sectors, including local and national government, as well as exploring bailiff practices.

This paper builds on extensive evidence developed by Money and Mental Health over the last seven years about the risks problem debt can pose to our health. In that time they have found that:

  • People with mental health problems are three times more likely to be behind on a payment than those without
  • Each year, almost six in ten (58%) people with debts of more than £30,000 had experienced suicidal thoughts
  • 100,000 people in problem debt attempt suicide each year in England, and those with two or more debts were five times as likely to have attempted suicide.

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