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Mental health issues linked to debt, says new report (21 November 2013)

Date: 21/11/2013
Duncan Lewis, Legal News Solicitors, Mental health issues linked to debt, says new report

A new report by think tank the Centre for Social Justice has found that personal debt in the UK almost equals the country’s entire output.

Researchers say that the £1.4 trillion national debt could “wreak havoc” with the population’s mental health and general wellbeing.

Researchers for the report “Maxed Out” have found that in the last decade, household debt almost doubled – the average household now owes £54,000. The researchers also found that every year more than 5,000 people are becoming homeless as a result of debt.

The think tank was set up by Work and Pension Secretary Iain Duncan Smith before the Conservative party came to power in 2010. The report is written by Labour’s former Work and Pensions Minister, Chris Pond.

Mr Pond also found that over the last 20 years, consumer debt trebled and now stands at £158 billion. Credit card debts in the UK have also trebled since 1998 and now stand at a total of £55.6bn.

Around 8m people in Britain have no savings – including half of all low income families. Mortgage repossessions are down on their peak at the height of the recession – which began with the 2008 banking crisis.

In 2012, a total of 34,000 mortgaged homes were repossessed, representing a 30% rise since 2006. A total of 300,000 homeowners were in arrears with their mortgage repayments.

There has also been a rise in the popularity of short-term lending solutions, which can often mean paying very high interest rates on repayments. The report says this is because many high street banks will no longer lend money to low income borrowers.

So-called payday lenders who offer short-term, low value bridging loans have increased their overall business in the UK from £900m in 2008-09 to more than £2bn, involving 8 million loans.

The number of borrowers using loan sharks to borrow money has also increased to 310,000.

Chris Pond says that the cumulative effect of debt on individuals can lead to mental health disorders.

“With falling real incomes and increasing costs of basic essentials, many – especially the most vulnerable – are sliding further into problem debt,” said Mr Pond.

“The cost to those affected – in stress and mental disorders, relationship breakdown and hardship – is immense.

“But so too is the cost to the nation measured in lost employment and productivity – and in an increased burden on public services.”

The homeless charity Shelter has said it is seeing an annual increase of 10% in the number of people calling its helpline about homelessness – many are about to lose their homes. Helpline advisers at Shelter receive on average 470 calls every day and are expecting an increase over the coming Christmas and New Year period.

The Maxed Out report makes the link between debt, homeless and mental health issues:

“While it is often hard to prove causation, there is a clear relationship between the following and problem debt: unemployment, family breakdown, addiction, and poor mental health.

“Similarly, many of these factors are interrelated – meaning problem debt can have diverse causes, requiring multidimensional support in order to fully resolve the underlying problems.”

Help with mental health law, housing and debt

Duncan Lewis is one of the UK’s leading mental health solicitors – and also specialises in housing and family law.

Duncan Lewis is also one of the leading Legal Aid solicitors in England and Wales.

If you need legal advice for mental health issues – including detention under Section 136 of the Mental Health Act 1983 – call the Duncan Lewis Mental Health Solicitors Helpline on 0203 112 1124.

For housing and debt advice – including mortgage repossessions, Local Authority issues or unlawful eviction, call Duncan Lewis housing solicitors on 020 7923 4020.

Call us now on 033 3772 0409 or click here to send online enquiry.
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