On the edge: What the cost-of-living crisis could mean for UK mental health

In an effort to reassure and stabilise the markets, the Chancellor, Jeremy Hunt, has signalled that the Autumn Statement will include tax increases and substantial spending cuts. However, as the UK sees the highest inflation for 41 years, this will not reassure many people who are already struggling with and concerned about rising food, energy, and housing costs and delays in accessing critical health and other public services. Politics is always about choices. In deciding how to raise income and whether to cut – and if so how – public spending, the potential impacts need careful consideration, particularly on living standards and well-being.

In the run up to the Autumn Statement, we start by highlighting existing research – led by the Centre and others – that demonstrates the negative impacts on mental health of poverty and austerity and that points to concrete alternative policy solutions.

What do we know?

Food Insecurity and Fuel Poverty

The cost-of-living crisis is most visible in rising levels of food insecurity and fuel poverty. In recent years, there has been a sharp increase in the number of people experiencing food insecurity in the UK, with around 4.7 million adults now affected. At the same time, steep increases in energy costs now mean that many are unable to pay their bills and face stark choices between eating and heating. With rising inflation, stagnant wages, and uncertainty about whether benefits will increase in line with inflation, it is certain that the numbers affected will rise sharply in the coming months. Food insecurity and fuel poverty cause considerable anxiety and distress ^{(1) (2)}. Those with disabilities and those experiencing poor mental health are more likely to be affected ⁽³⁾.

Several recent reports illuminate the impacts of food insecurity and fuel poverty:

• A review of research specifically on food insecurity and severe mental illness underscores this, showing the profound effects on all aspects of people’s lives of lack of and daily worries about food and income and how these exacerbate existing challenges. (Food insecurity and severe mental illness: understanding the hidden problem and how to ask about food access during routine healthcare)

• A report from the Independent Food Aid Network and the Joseph Rowntree Foundation, based on first-hand accounts, highlighted the central role of low income, the limitations and bureaucracy of the benefits system, and the shame associated with food bank use in the increase in food insecurity and associated distress, particularly among people living with disabilities. (Pushed to the Edge: Poverty, food banks, and mental health by Joseph Rowntree Foundation and IFAN)

• Analyses of data from Understanding Society, a longitudinal study of large numbers of households in the UK, found that fuel poverty was associated with poorer well-being on a range of indicators. This association was strongest when a composite measure of fuel poverty was used. Importantly, the researchers did not find any evidence that this was association was due to lifestyle factors (e.g., physical activity, diet). They did find evidence that it was partly accounted for by material deprivation. (Getting Warmer: Objective and Subjective health and Well-being)
  
  
• Finally, in analyses of data from YouGov surveys of the general public and benefit claimants, CSMH researcher Professor Ben Baumberg Geiger and colleagues found that, among working-age people who are food insecure, 53% were claiming income/work-related benefits; and among people who were severely food insecure, 62% were claiming benefits. (Hunger and the welfare state: Food insecurity among benefit claimants during COVID-19)

Debt

To make ends meet, more and more people are relying on credit cards and loans to meet basic needs. This is pushing more people into debt. Debt has profound impacts on mental health ⁽⁴⁾.

• An analysis of data from the Adult Psychiatric Morbidity Survey and an in-depth survey of people and professionals with experience of issues around suicide, led by the Money and Mental Health Policy Institute, shows stark connections: those with problem debt are three times more likely to consider suicide than others, and over 100,000 people in debt attempt suicide in England each year. Persistent poverty and financial insecurity and threatening letters from lenders are key factors that impact on the experience of debt and increase anxiety. (A Silent Killer: Breaking the link between financial difficulty and suicide)
  
  
• An analysis of data from a south-London based survey, by a team including colleagues from the Centre, found that those who had 3 or more debts were over 3 times more likely to experience mental health problems, compared with those who had no debts. Put another way, around 60% of those who had 3 or more debts experienced mental health problems. (Debt, common mental disorders and mental health service use)
• A recent Centre-led review of studies exploring the effects of precarious employment on mental health found that financial instability could often lead to debt. Fluctuations in income and irregular payments, especially at rates of low income also prevented saving and financial planning. (How Does Precarious Employment Affect Mental Health? A Scoping Review and Thematic Synthesis of Qualitative Evidence from Western Economies)

Benefits and Low Income

There is abundant evidence that those in receipt of benefits and those on low incomes are more likely to experience high levels of mental distress ^(5)(6)(7). This can be exacerbated or mitigated by social security and tax policy.

• Analyses of data from Understanding Society found that the introduction of Universal Credit – with reported increases in delayed payments and use of sanctions – was associated with a near 7% increase in mental distress among claimants. With the UK economy heading into recession and costs rising, more and more people will be required to navigate the current benefits system. (Effects on mental health of a UK welfare reform, Universal Credit: a longitudinal controlled study.)
  
  
• Conversely, a report from the NIHR Mental Health Policy Research Unit summarises evidence that better access to benefits is associated with less mental distress and lower suicide rates. In this report, positive mental health impacts were considered to stem from support given to low-income families in the form of tax credits and cash benefits. (Impacts of the Social Security System on Claimant’s Mental Health and Well-being, and how might harms be mitigated.)
  
  

• Extending this, Centre researcher Professor Stephani Hatch and colleagues recently completed a rapid evidence synthesis of randomised control trials of interventions to improve social circumstances among individuals with mental health problems across several domains, including employment, education, and social isolation. They found that multidisciplinary interventions could bring positive change to the social circumstances of people with mental health problems (Interventions to improve social circumstances of people with mental health conditions: a rapid evidence synthesis)
  
  
• Centre researcher Professor Ben Baumberg Geiger also calls policymakers and researchers to think about disability when thinking about welfare, and has lead research on different models of disability assessments and claimant experiences. He concludes that while it is possible to implement a direct assessment of work capacity for social security benefits, further research is necessary to understand how best to maximise validity, legitimacy, and cost-effectiveness. (Assessing work disability for social security benefits: international models for the direct assessment of work capacity)

Families and Young People

Families with children are among the most affected by increasing poverty. According to recent estimates, around 1.8m children are growing up in very deep poverty (i.e., cannot meet basic needs) and, again, this will increase in the coming months. Household poverty and insecurity has direct impacts on children and young people, including on mental health and well-being ⁽⁸⁾.

• In analyses of data from the UK birth cohorts, Centre researcher Dario Moreno-Agostino shows that pre-existing generational inequalities in mental health may well have worsened since 2020, with younger people more vulnerable to poor mental health during the pandemic. While the stresses associated with the pandemic may have lessened, the ongoing economic crisis will bear heavily on young people’s mental health.
  
  
• The REACH study, an ongoing cohort study exploring mental health among young people led by the Centre, has shown that, during the pandemic, mental distress increased most among those adolescents in families that were directly impacted by COVID-19 and related social restrictions. Key factors negatively impacting on mental health include living in overcrowded and low-income households. These impacts are likely to be exacerbated further by the current cost-of-living crisis and the imminent recession. This is causing further anxiety and distress. A recent survey commissioned by King’s College London found that a third of parents surveyed think the rising cost of living will greatly impact on their children’s mental health. (Covid-19, Social restrictions, and mental distress among young people: a UK longitudinal, population-based study and A third of parents think the cost-of-living crisis will significantly affect their children’s mental health)

• A review of qualitative evidence on the links between precarious employment and mental health, led by Centre researcher Dr Annie Irvine, found that financial instability had direct and indirect effects on relationships and distress. Money worries meant parents had to restrict their own and their children’s social activities. Feeling unable to meet the social or material needs of dependent children was distressing for parents and often led to feelings of guilt and failure. Increases in the cost of living for families already on low incomes will further exacerbate these impacts on the mental health of parents and children.
  Paper forthcoming

What is planned?

In response to the current economic crisis, it appears that the government is primarily focused on reducing the national debt through a mixture of tax increases and public spending cuts. There is a real danger, based on previous evidence, that this approach will worsen the impacts of the cost-of-living crisis among those on the lowest incomes and further limit access to services at a time of greatest need.

Cuts to Health and Public Services

There is extensive evidence that austerity (i.e., spending cuts to reduce government deficits) impacts negatively on health and public services and on the most vulnerable in society. In a context of rising poverty and increasing need for public support, more austerity will be devastating and people will die as a consequence. It is those at the margins who will suffer the most.

• A large survey conducted by Greater Manchester’s Disabled People’s Panel, which includes Rick Burgess, a member of the Centre’s Lived Experience Advisory Board, shows how those with disabilities, including mental health problems, experienced worse quality of life as a consequence of past austerity measures and the pandemic, and how the cost-of-living crisis will further worsen an already deteriorating situation. (GM Big Disability Survey 2022: Cost of Living and One in five disabled people can’t afford essentials, survey reveals - Disability News Service)
  
  
• Further, austerity increases uncertainty in services, with knock on effects for those who need support. Work led by Centre partners Black Thrive Lambeth, with support from our researcher Dr Annie Irvine, notes the negative impact of uncertain and short-term funding on the stability and sustainability of local employment services, due to constraints on the capacity to invest and build meaningful long-term plans. (No Wrong Door: a study of employment support providers in Lambeth)
  

• The impacts of any health and social care funding cuts are likely to be the most pronounced, given the extent of rising need. Research exploring the relationship between austerity and mental health service provision shows that austerity and associated policies have contributed to an overall increase in the burden of mental distress and marginalisation within the UK. Prior to the Coronavirus pandemic, healthcare funding increased at a rate below the long-term average and did not keep pace with the rising demand for healthcare as the population ages. Mental healthcare services have been feeling this pressure, as evidenced by high demands for inpatient beds and the increased use of the Mental Health Act.
  The Impact of Austerity on Mental Health Service Provision: a UK perspective
  
  
• Prior research has explored options to reduce psychological distress linked to social disadvantage, including co-location of welfare advice services (for example, debt and access to welfare benefits) in healthcare settings. Research led by Centre lecturer Dr Charlotte Woodhead examined the effects of co-located welfare benefits and debt advice on mental health and GP consultation frequency. The study found that such co-located welfare advice improved short-term mental health and well-being, reduces financial strain and generates considerable financial returns. This research is ongoing via the UCL Health Justice Partnerships team. (Impact of co-located welfare advice in healthcare settings: prospective quasi-experimental controlled study)

What needs to change?

Policy reform

The combined effects on mental health of increasing poverty and debt, decreasing – in real terms – benefits and wages, and cuts to public services will be profound. Those who are most disadvantaged, marginalised, and vulnerable will be impacted the most.

Based on the above research, we select 10 broad and specific policies, both short and medium term, that can mitigate these impacts:

1. Continuation of the energy price cap, with measures to prevent ‘self-disconnection’ among the most vulnerable
   
   
2. More targeted support for with food, energy, and housing costs for those most in need
   
   
3. Increase in welfare benefits in line with inflation, as a minimum
   
   
4. Reforms to current welfare systems to simplify claims procedures and to ensure they are accessible and non-stigmatising
   
   
5. Provision of services to support and advise people facing sanctions or changes in benefit entitlements to mitigate distress and to prevent them falling into debt
   
   
6. Investment in health and public services that address waiting times, low capacity, and inconsistency in services by region, and
   
   
7. Investment, in particular, in public services that improve access to employment, decent housing, legal advice, community supports, and social engagement
   
   
8. For families and young people, implementation of our young-person-led six-point plan to enable young people to thrive post-pandemic
   
   
9. Free school meals for all to mitigate the effects of household poverty and food insecurity
   
   
10. Develop and implement, within health services, a ‘poverty aware paradigm’ which recognises the impact of poverty on individuals and communities accessing services. Integrating screening for poverty into health settings may increase our ability to identify those at particular risk and allow for better referral pathways from health to social services, including housing and employment. (see Should we screen for poverty in primary care?)

Austerity has failed. It has failed to reduce public debt or stimulate economic growth and has caused considerable distress for many people. Further cuts to core public services will only exacerbate the suffering caused by rising poverty and inequality. 

Work by the Centre

The Centre continues to lead research on the complex relationships between society and mental health, currently in our three research programmes: Young people and social change; Marginalised communities; and Work and welfare reform.

You can read about Centre related work via the links below:

Research

• Improving job quality reduces depression and anxiety for women
• Increase in mental distress among young people from disadvantaged backgrounds following the start of the COVID-19 pandemic
• Excess deaths in people with mental health conditions increased during the COVID-19 pandemic
• PhD research on food insecurity, mental health and welfare change in the UK by Marina Kousta
• Rise in UK state pension age ‘could stop women caring for older relatives’

Seminars

• Towards a mental health-promoting welfare system: what we know and what we don't – with Ben Baumberg Geiger
• They think I’m a scrounger: Exploring unemployment, race and health - with Black Thrive

Our Sick Society podcast

• Social class, poverty and young people’s mental health
• Race, employment and health

In addition, CSMH is about to launch a project, funded by the Maudsley Charity, to develop packages of social interventions that can be fully integrated into mental health services to address the social needs of those with severe mental health problems.