A mental health charity has claimed that 100,000 people in problem debt attempt suicide every year and as many as half a million think about it.
Research by the Money and Mental Health Policy Institute (MMHPI), founded by finance expert Martin Lewis, said problem debt takes a ‘devastating mental toll’ on tens of thousands of Britons each year.
Data from the NHS Adult Psychiatric Morbidity Survey was used to compile the report which has three main findings:
- Over 420,000 people in problem debt considered taking their own life in England last yea
- More than 100,000 people in debt actually attempt suicide each year
- People in problem debt are three times more likely to have considered suicide
The charity says much of the blame for the problem can be laid on the aggressive nature of debt collecting from many organisations, including local authorities. Of particular concern is the wording of letters received by consumers who are already under intense pressure because of their debts.
Said Martin Lewis: “The fact a law set decades ago doesn’t just allow companies to use intimidating language when collecting debt, but near forces them to do so, causes tragedy.
“New rules are needed to make the language in lenders’ letters easier to understand, and to prominently signpost people to help. That will save lives.”
Research undertaken by the National Centre for Social Research has revealed 1 in 14 adults is in problem debt, meaning they have fallen very behind on paying bills or credit agreements or have been cut off by a gas, electric or water supplier in the past year.
They are three times more likely than the general population to have thought about ending their life.
MMHPI is calling on the government to update the Consumer Credit Act of 1974 which allows payment demands threatening court action to include phrases like: ‘If you do not take the action required by this notice before the date shown then further action set out below may be taken against you.’
Said Martin: “The last thing those struggling with debts need is a bunch of near thuggish letters dropping through the letterbox, in a language you can’t understand, threatening you with court action.
“And with such a tight link between mental health and debt crisis, we know many of the people receiving these letters are extremely vulnerable. These letters are destroying lives, but it doesn’t have to be like this.”
A government spokesperson said: “Suicide is the most devastating outcome for people struggling with the challenges of life and we are committed to helping people in problem debt receive the proper support. We’ve increased funding for the Money Advice Service to over £56m, enough to help over 530,000 people get the debt advice they need.
“We’re also introducing a ‘breathing space’ from problem debt to give people time to get their financial lives back on track. Every suicide is a preventable death and we are working hard with our partners across government, businesses and communities to help tackle this problem.”
The government’s Money Advice Service (MAS) has issued new guidance to local authorities on the collection of council tax to prevent what the House Of Commons Treasury Select Committee condemned as ‘overzealous and with routine recourse to bailiffs.’
Figures show that between 2011 and 2017 council tax arrears rose from 168,000 to 217,000 with total arrears now £2.84 billion.
The new MAS guidance has been welcomed by charities who help consumers in debt and has also been praised by the Local Government Association’s Resources Board.
Chairman Councillor Richard Watts commented: “Councils have a duty to their residents to collect taxes, so that important services can be delivered for local people. However, councils do realise that times are tough and do their best to protect those affected the most.
“It is good to see positive examples of councils taking a sympathetic and constructive approach to the way they collect unpaid tax highlighted by MAS. We would urge all councils to carefully consider the recommendations in this report in light of their own practice and local circumstances.”