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Are COVID-19 money worries driving mental health concerns?

With the pandemic continuing to take its toll, Lubaina Manji from Nesta Challenges discusses the impact of money worries on people’s mental health.

This is a guest post by Lubaina Manji. All views expressed are Lubaina’s own and not necessarily shared by Which?. 

It’s no secret that the pandemic is taking its toll, and no one is immune to the impact the virus is having.

Aside from the obvious risk to physical health, it is infecting even the most routine aspects of daily life – be it going to school, doing the weekly shop, visiting family and friends and how we work (if we’re fortunate enough to still have work that is). It’s also having a huge impact on people’s finances.

Read all the latest COVID-19 news and advice on our dedicated hub

Life and incomes have changed significantly, so it’s little wonder all of this is affecting our mental health – and is likely to for a long time to come.

In fact, Nesta Challenges research suggests that for more than a fifth of us, money worries brought on by the crisis are having a bigger impact on our mental health than concerns for our physical health.

A quarter of people say they feel more stressed out than usual and for a fifth (19%), money worries are causing them to lose sleep. 

Periods of uncertainty and mental health

The longer this period of uncertainty continues, the bigger these money worries become. Added to the fact households are effectively cooped up together 24/7 – it puts significant strain on relationships.

Some 16% of adults say it’s having a negative impact on their relationship with friends and family as their concerns start to pile up. Among those more likely to be parents with children at home (35-44 years old) this jumps to almost a third (31%).

In turn, this causes almost four in 10 (38%) adults to be concerned about the impact of financial stress on a loved ones’ mental state – creating a vicious cycle, detrimental to mental health.

In recent times (and thankfully) more attention has been placed on mental health awareness, and we’re seeing more initiatives to improve mental health and wellbeing.

But with one in four adults in the UK experiencing ill mental health, according to NHS England, we’re talking about a significant national problem.

For those already battling a mental health illness or cognitive impairment, the current crisis could well compound the issue. We know from our previous research that around half (51%) of people fear vulnerable friends and family will fall victim to sophisticated scammers exploiting the pandemic.

Mitigating risks and concerns

While we can’t predict when things will get better for everyone, or take control of the future, we can seek assistance to help manage these risks and concerns in the here and now.

Through its Open Up 2020 Challenge, Nesta Challenges (in partnership with the Open Banking Implementation Entity) encourages, supports and incentivises entrepreneurs to come up with innovative solutions to pressing social problems.

In doing so we have the privilege of working with some talented people and innovative companies that are doing incredible things – some of which may help people to better manage their money during these difficult times, and hopefully relieve some of the associated worries and anxieties.

Two such apps, Kalgera and Touco, are currently among the 15 Open Up 2020 finalists and are designed specifically to support people with mental health or cognitive issues, manage their money and stay safe.

Take a look at all the finalists here

Now, more than ever, we’re reliant on technology to cling onto a sense of normality in these far from normal times.

Be it by allowing us to continue to work (as I am now, in writing this from my kitchen table), stay connected with friends and family, home school children or access entertainment.

Using technology to stay on top of our finances is another key part of this mix that will help empower us to take some control of our worlds, if not the wider one at present, and better protect our mental health.

This was a guest post by Lubaina Manji. All views expressed were Lubaina’s own and not necessarily shared by Which?.