A new survey of over 2,000 British adults has found the most likely cause of stress is personal or household finances.
Mirroring previous studies, the research by insolvency and restructuring trade body R3 and ComRes found that 24 per cent of consumers surveyed said that their personal or household finances are currently having a negative impact on their mental health.
Close behind on the list were personal or family members’ health issues at 23 per cent. Their own or family members’ jobs was next priority (16 per cent) with UK or global events near parity at 15 per cent. The top five was completed with 13 per cent worrying about relationships with family.
Overall, 41 per cent of adult consumers surveyed said that they were worried about their current level of debt – rising to 54 per cent among those aged 18-44 – while 40 per cent say they often or sometimes struggle to make it to payday.
Chair of R3?s personal insolvency committee, Mark Sands, commented: ‘Whatever else is going on in the world, things much closer to home are most likely to affect people?s mental health. No matter how old you are, where you live, or what you do, personal finance concerns – even concerns about others? finances – have a significant impact on your wellbeing.’
He continued: ‘The biggest pinch comes for those in the 35-44 age bracket. Many in this age group are still paying off their mortgage, have children to support, and may even be supporting their parents, too. It?s no surprise that it?s this age group that is most worried about their debts, most likely to struggle to payday, most likely to enter an insolvency procedure, and most likely to say their finances have a negative impact on their mental health.’
With the news from the budget this week that national insurance costs for the self-employed will rise, concern has also been voiced that the changes have the potential to force more self-employed people to increase personal debt to make ends meet.
CEO of Creditfix, Pearse Flynn, commented: ?Any increase in national insurance for the self employed could prove very harmful to the personal finances of tens of thousands of people across the UK.
?In such a challenging economic environment, individuals working for themselves to make a living are often at the sharp end of any cutbacks in consumer or business spending. The number of self-employed people currently undertaking an IVA (Individual Voluntary Arrangement) to tackle personal debt issues is on the rise, increasing from 5.76 per cent of all applicants to 7.88 per cent in the last 12 months.?
Here are some top tips for dealing with debt
- Acknowledge the problem. Avoiding personal finance problems will only make them worse.
- Ask for help. Professional advice is readily available and is often free of charge, whether it?s an initial meeting with a licenced insolvency practitioner, or help from the National Debtline, or a local Citizens Advice Bureau.
- Prioritise the payments of your debts. An advisor, as mentioned above, can help.
- Budget. Be honest with yourself, identify your essential financial commitments and cut back on luxuries. At the very least, maintain the minimum monthly credit card payments to retain your credit rating while you sort out your finances.
- Communicate with your creditors. By getting in touch with your creditors at an early stage, you can give them an opportunity to help that might not be there in future.
- Be transparent. Give full details about your financial situation to both your advisor and your creditors.
- Take your time before choosing the solution that?s right for you. Don?t allow yourself to be pressurised, and make sure you are taking advice from a regulated professional.
- Don?t keep digging. Avoid turning to new credit cards or payday loans to plug the gap in your day-to-day finances. This might only make your situation worse.
- Learn about your options. If you require a formal insolvency procedure, there are a number of options appropriate to different levels of debt. Formal options include Debt Relief Orders (DROs) for smaller debts, Individual Voluntary Arrangements (IVAs), and bankruptcy. It will cost more time and money if you start off in the wrong solution, so make sure you take advice about all the options open to you.