Evaluation Scotland Wales
The UK Strategy for Financial Wellbeing is taking forward the work of the Financial Capability Strategy Opens in a new window


Money and Mental Health Rapid Evidence Review

Evidence type: Review i


There is a strong and growing body of evidence that demonstrates the inter-related nature of mental health problems and financial difficulties, often described as a vicious cycle. People who experience mental health issues are particularly susceptible to experiencing financial difficulties – and people in financial difficulty often also experience challenges to their mental health.

Recent statistics show that just under 1 in 3 UK adults experience mental health challenges, an increase from around 1 in 5 in 2018 (Money and Pensions Service, 2022), so there is an urgent need to understand this relationship – especially to inform the UK Strategy for Financial Wellbeing, which is co-ordinated by the Money and Pensions Service (MaPS) and in which mental health is an important ‘cross-cutting lens’.

Previous work by MaPS has explored these issues, and this review aims to identify evidence emerging since 2018, considering the impact of the pandemic and the current cost of living situation on the relationship between money and mental health.

The study

The rapid evidence review aimed to examine the relationship between money and mental health, considering the impact of the COVID-19 pandemic and the current cost of living situation. The study addressed several research questions:

  1. What are the links between money (broadly defined to encompass all aspects of personal financial wellbeing) and mental health?
  2. How, and to what extent, do money and mental health impact each other?
  3. Are there particular individual characteristics or shared life experiences that increase the risk of a negative outcome as a result of the link between money and mental health?
  4. Are there any noticeable patterns in behaviours or attitudes that differentiate women and men when looking at money and mental health?
  5. Are there specific barriers to retirement planning amongst those with mental health issues?
  6. Does the literature differentiate between people with what might be classified as having Common Mental Disorders (CMD - e.g., depression, anxiety) and Severe Mental Illness (SMI – e.g., schizophrenia, bipolar, personality disorders)
  7. How can someone be better supported to improve both their personal financial and their mental wellbeing?

The review followed a three-phase approach, involving scoping the literature, analysing the evidence, and synthesizing key themes and findings. The analysis incorporated studies published since 2018, using keyword searches, recommendations from experts, and sources from MaPS’ Financial Wellbeing Evidence Hub. The findings were organised into themes and identified gaps in the literature.

Key findings

First, evidence confirms the continuation of the relationship between money and mental health previously identified in research prior to 2018.

  • Mental health difficulties are associated with financial challenges: for example, individuals experiencing mental health issues are more likely to work in lower paid occupations and/or rely on employment support
  • Financial difficulties can negatively impact mental health: for example, the proportion of people experiencing suicidal thoughts or feelings was higher amongst those with debt, and those who were behind on multiple payments.
  • The relationship between money and mental health forms a vicious circle, where chronic financial stressors deplete psychological resources and reinforce the stigma associated with both mental health and financial challenges.

Second, evidence demonstrates that the COVID-19 pandemic and the cost of living situation have exacerbated both the mental health and personal or household finance challenges faced by many people in the UK.

  • During COVID-19, 1 in 4 people experienced a mental health problem for the first time, and the proportion of people reporting mental health challenges since 2018 increased to 30% from 21%.
  • Those with mental health problems were more likely to be in debt and to have missed payments during the pandemic.
  • A significant number of UK adults felt anxious, depressed, or stressed due to financial concerns attributed to the cost of living.
  • More households struggled financially while fewer felt financially secure.
  • The rising cost of living negatively impacted mental health, with 52% reporting negative or strongly negative effects, and an increased risk of suicidal thoughts for those in debt.

Third, continuing patterns identified before 2018, some groups are particularly exposed to the co-incidence of mental health and financial challenges:

  • Cost of living affects the mental health of households with disabled family members, with 77% reporting an impact.
  • Women facing mental health challenges are more likely to experience financial difficulties due to the cost of living, but are less likely to be asked about the impact of their condition on their finances during mental health treatment.
  • Minoritized groups, who are more likely to experience poverty and deprivation due to lower incomes and employment inequalities, experience additional mental health burdens such as trauma, grief, isolation, bullying, and racism.

The review highlights evidence limitations, including inconsistent definitions and measurements of the relationship between money and mental health. More longitudinal studies and systematic reviews are needed to understand causality and support effective interventions.

Points to consider

  • Methodological strengths/weaknesses: The review methodology used a rigorous, methodological but flexible approach based on the rapid evidence assessment approach.
    • Papers are cited from a wide variety of reputable sources such as numerous academic peer reviewed journals, so the study appears thoroughly researched.
    • The study highlights the inconsistent definition and measurement of both mental health and money in research related to the intersection of these areas. This inconsistency may affect the comparability and generalisability of the findings, as different studies might employ different conceptualisations and measures.
    • The study acknowledges the limited evidence on causality and the lack of longitudinal analysis. The absence of robust longitudinal studies and systematic reviews hampers the ability to establish causal relationships between money and mental health, as well as to understand the long-term patterns of this relationship.
  • Relevance This report is relevant to all stakeholders, academics and policymakers with an interest in mental health, particularly in relation to financial wellbeing.
  • Generalisability/ transferability: The study primarily focuses on evidence from the UK. This may limit the generalisability of the findings to other countries or regions with different socio-economic contexts, healthcare systems, or cultural factors.
    • The specific experiences and dynamics related to the COVID-19 pandemic and the cost of living situation in the UK may not directly apply to other settings.
  • Applicability: The study highlights a lack of broad and systematic evidence on the long-term effectiveness of interventions related to money and mental health. This limitation implies that the practical applicability of the findings regarding interventions may be constrained.

Key info

Year of publication
United Kingdom
Contact information

Hayley James

Andy Lymer