Money worries creating mental health timebomb with young people

Young people are three times more likely than older generations to have their mental health impacted by money worries, research from responsible lender, Creditspring reveals.

Four in ten (39%) people aged 18-34 say their mental health has significantly worsened as a direct result of the cost of living crisis, compared to just 13% of over 55s.

Three in ten (28%) young people say their mental health is worse than it has ever been because of financial concerns whilst fewer than one in ten (8%) of over 55s feel this way. Given just 9% of over 55s say their savings have run out compared to 23% of younger people, it’s likely that the older generation has built a more significant savings cushion compared to 18-34 year olds.

The ongoing cost of living crisis has led to increased reliance on credit and growing debt piles for many, especially younger people. For example, a fifth (20%) of young people are reliant on credit to pay bills compared to 3% of over 55s.

With young people more likely to be forced to turn to credit to make ends meet, the risk of building debt is significantly increased. This has led to more than a third (34%) of 18-34 year olds admitting that they’re now in more debt than they were 12 months ago.

A third (33%) of people aged 18-34 admit that being in debt is negatively impacting their mental health, three times the proportion of over 55s (just 11% feel this way). Worryingly, young people don’t see much hope for their mental health in the short-term, as a third (32%) say their mental health won’t improve as long as they remain in debt.

For three in ten (31%) young people, their money worries have reached the point where they’re unable to sleep at night – compared to less than one in ten (9%) of over 55s. The same proportion (31%) of young people also report that financial concerns have impacted their mental health so much that it is affecting their ability to perform well at work.

Recent research from the Resolution Foundation found that young people between 18 and 24 had the poorest mental health out of any age group and one in 20 in this age group were out of work due to ill health – making them more likely to not be working due to ill health than those in their early 40s. The research also found that a third of those aged 18-24 experience mental health disorders.

This bleak situation has led to a fifth (20%) of younger people seeking support for their mental health and 21% have started taking medication due to this.

Neil Kadagathur, CEO and Co-Founder of Creditspring, said, “Money worries and mental health are intrinsically linked – daily struggles to afford basic essentials, emptying savings pots and ever-growing debt are impacting the UK’s mental health with ever-growing numbers of people finding themselves in this heartbreaking situation.

“Older people who may have built a savings cushion to fall back on and likely have a higher household income likely aren’t facing the flood of money worries that the younger generation are struggling to overcome. Banks and other lenders need to ensure that they are offering more holistic support packages – especially to young people – which offer effective advice and tools for borrowers as well as a more collaborative approach combining financial support with expertise and resources from mental health professionals.

“At Creditspring, we understand the serious impact of financial pressures on mental health so ensure that whilst we’re providing financial support to members, we’re also referring them to non-profits such as MoneyHelper or Samaritans who can provide specialised mental health support for those who need it.”

Creditspring provides a new way to access credit safely. FCA-regulated, it is a credit subscription service that responsibly offers short-term, affordable credit to borrowers. Members pay a fixed membership fee every month to allow them to access two no-interest loans per year with clear repayment terms, capped costs and no hidden charges, late fees or confusing interest rates.