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Introduction 

In Essay 1, we introduced the relationship between personal debt and a person’s mental health – showing that, based on the works of contemporary researchers in the field, debt is a significant factor in its own right – and goes ways towards explaining the wider relationship between socio-economic status (SES,) financial health and psychological well-being.  Unsecured debt, new research shows, serves as a mediating variable between SES and common mental disorders (CMD) – in most odds-ratio studies, when debt levels are applied to the same surveys, the significance of income is diluted significantly. Debt then can be a risk to the mental health of anyone, as the association is indiscriminate in terms of earnings.   

In this essay, we aim to delve deeper into specific CMD’s and their associations with personal debt. Of course, different people respond differently to their debts; and many will become more stressed, anxious or irritable than others. Many people’s debts may be perfectly manageable, and thus not have any great effect on their mental health. The attention of this project is occupied by those at the other end of the spectrum, by those whose debts are a significant burden and are psychologically affected by them. Among those whose debts do have an impact on their psychological health, there is a near endless number of ways in which the effects of carrying problem debt can manifest psychologically, and each form of response has its own dangers. This paper will break down responses into two categories – internalized and externalized. Internalized responses, in brief, introduce associations with mental disorders – such as depression, anxiety and suicidal thoughts; whereas external responses are more behavioural, such as deep states of anger, self-sabotage, conflict with others and irritableness. Due attention will also be paid to age, as evidence suggests it is a central factor in explaining differences in response. 

 The Debt Cycle 

Before delving deeper into associations between debt and varying responses, it is important to present one of the latest findings in the field – the cyclical nature of the relationship between debt and poor mental health. To assume debt triggers poor mental health problems, and this is the extent of the relationship would be inaccurate. In reality, mental health problems can equally be a trigger causing someone to incur debts. More importantly, breaking away from these linear relationships, the stresses of carrying debt can significantly damage a person’s mental health; and consequently, the persons deteriorating psychological wellbeing helps to aggravate the position they already find themselves in by accumulating more debts, based on decisions that they may not have made without the weight of their original debts and the psychological impact of them on their shoulders. Recent research conducted by Chris Fitch of the Money and Mental Health Policy institute has explored this in depth, and their findings show a cyclical, intricately entwined relationship between debt and CMD’s. In a 2017 survey with a sample size of six thousand, 86% of respondents claimed their financial status impacted their mental health, with 72% reporting that their mental health impacted their financial status. Crucially, with regards to debt – 93% said they spent more than usual, 74% avoided dealing with creditors and 59% took out a loan they ‘otherwise wouldn’t have’ during periods of poor mental health. The MMHPI’s ‘Money on Your Mind’ report offers more details on the cyclical relationship, and particular focus is placed on the actual legal capacity of a highly indebted or mentally ill person in regard to taking out loans or credit.  

In, Paper 5, the recommendations section of this project will pick this up in greater detail. For now, the relevance of the nature of the relationship is that when considering internalized responses, readers should note that debt stress resulting in manifesting depression, anxiety or suicidal thoughts, for example, are in many cases being constantly aggravated by this cycle. This is an important point to clarify before looking at internalizing responses – as if we consider the relationship lineally as opposed to cyclically, the true, accumulative danger of internal response is not properly grasped.  

 Responses and Manifestations; Internal vs External; significance of age. 

As established in Essay 1, evidence suggests that debtor status is more consistently associated with mental health than any other single traditional indicator of SES and this association does not vary across income. How an individual responds to debt stress, however, is entirely subjective. Regardless throughout research certain patterns are emerging to give an overview as to how people respond, either internally or externally – with reference to age, gender or marital status among other variables. Again, as mentioned in the introduction, this section of the paper will examine responses, associations and dangers in categories of internalized response and externalized response.  

Internal Response’s and Effects. 

Firstly, the body of evidence on internalized responses or effects of carrying problem debt continues to grow and relates directly to the development of common CMD’s. As such, debtors who respond mostly internally demonstrate associations between debt and mental health problems most clearly. Large amounts of unsecured debt can lead to a significant spikes in stress level and worries over the future, as well as negatively impacting basic lifestyle and health choices like whether or not to smoke or drink excessively, according to Grafova – this is supported by Jenkins, who in 2008, found that those in debt were three times more likely to suffer from alcohol dependence. Consider now the above outlined cyclical relationship. Over time as this vicious cycle repeats, the stress and burden of indebtedness wear away at a person’s psyche, to the point where this stress eventually spirals towards clinical depression, anxiety or suicidal thoughts. This is a grave concern, and the evidence of this process continues to mount. In Reynolds’ study for the Social Science and Medicine Journal, worry about debt was the strongest independent socioeconomic predictor of the depression and suicidal thoughts score at both initial and follow-up occasions.  Furthermore, According to Drentea, indebtedness increased symptoms of depression, anxiety and suicidal thoughts above and beyond SES factors like income, wealth or education. Debt increased the likelihood of depression, anxiety and suicidal thoughts by .14, .17 and .16 of a standard deviation respectively. Finally, on depression specifically, Chris Fitch found in 2016 that those in debt were four-times as likely to suffer depression than those who were debt free; and also, twice as likely to still suffer from the disorder even after 18 months of treatment. This body of evidence in favour of associations between debt and serious CMD’s highlight the alarming dangers associated with the internal effects of debt on the human mind. 

Regarding age and type of debt, internalized responses present a very interesting picture. Firstly, on age, evidence suggests that the relevance of the debtor’s age is unique to each CMD. Of course, again, each individual may respond differently and there is no definite formula – but some overall patterns are available. Firstly, anxiety has been found not only to affect younger adults primarily but in fact disproportionately in odds-ratio tests conducted separately by Drentea, Richardson and Jenkins. There are plenty of reasons for this; of course younger adults are more likely to succumb to 21st century consumerism and materialism; younger adults have also typically yet to maximise their earning potential as they are at the beginning of their careers and may not even have settled into a chosen field in which they want to climb the ladder of; many already deal with debt relatively exclusive to young adults, student loan repayments for example (which in 2012 accounted for $1 Trillion of the United States total debt;) and some younger adults are even caught in-between the rock of starting their own family, and the hard place of perhaps having to support elderly relatives. Adding to these stressful, but natural challenges of the young adult a significant balance in unsecured debt and the vicious cycle which characterises its relationship with mental health – and the dangers are relatively clear.     

Furthermore, the tragic relationship between men aged 20-50 in the UK and suicide is increasingly growing into mainstream consciousness, as the reader may know, suicide was the biggest killer of British men within this age group in 2015. What is incredibly surprising then is that regarding clinical depression and suicidal thoughts, amongst indebted adults, levels are at their lowest around the between the ages of 35-45, accounting for the older half of this highly vulnerable population group. Indeed, associations between debt and depression are highest amongst the elderly – despite the linear relationship between anxiety and age, which shows the elderly are very rarely affected. Of course, the British suicide problem affects men over women at a ratio of 75:25, which would explain perhaps why clinical depression and suicidal thought rates go down for all adults aged 35-45; but in 2011 Meltzer found, when looking specifically at the impact of debt on women, that they were affected by anxiety disproportionately as compared to depression.  Overall, this picture is very complicated and undeniably a wide range of factors going beyond even finance come into play when discussing the British male suicide problem – however, it is to this author’s genuine surprise that the indebted, older half of this same vulnerable age group are the least vulnerable to clinical depression and suicidal thoughts.                    

External Responses           

Alternatively, as opposed to the effects of debt manifesting internally, these same stresses and burdens may manifest instead externally in a debtor’s behaviour. Indebtedness is associated with irritableness, general states of anger, self-sabotage and engaging in conflict with others just as strongly, if not stronger as it is with depression or anxiety. These are of course behavioural responses as opposed to mental disorders, but they are equally the product of poor mental health associated with indebtedness. It is unsurprising that younger adults gravitate more towards these outward manifestations than older adults in most surveys – after all, volatility and temperamental inclinations tend to deteriorate with age and experience most studies have shown. Younger adult’s levels of debts are at record levels, their relationship with credit cards and payday loans being at a near epidemic status in particular. Statistically, younger adults are more indebted than ever before. In 2016, the Money Advice Trust over one-third of 16-25-year old’s either had personal debts of over £4000, or lived in households which had more debt than assets – these debts are accumulated almost entirely through credit or loans and on top of an average student loan balance of £25,505. Furthermore, Drentea and Reynolds have found that each year of age is associated with a 2% drop in the odds of being in debt – given younger adults disproportionate levels of credit card usage, it is not difficult to imagine why this might be. Drentea appropriately described younger people’s relationship with materialism as a ‘fixation on expression as opposed to basic survival.’ This gives but a short insight into the extent of the problem. Again, younger adults are more prone to external, behavioural responses to their debt problems. In odds-ratio studies – younger samples, defined as aged 18-30, displayed signs of anger, self-sabotage and irritableness at significantly higher rates than those over 30, even where their total debts were similar. With this in mind, similar attention must be paid to external responses to indebtedness as well as actual mental disorders. 

 To Conclude. 

This paper has detailed the variety of ways in which debtors respond to the stresses of indebtedness – in categories of internal and external. Age has, with good reason, been presented as a significant factor in this picture. It would be a mistake, however, to suggest that responses can be neatly categorized as old=internal; young=external. Where in this picture would middle-aged adults fit in? As above, middle-aged adults are the least likely to suffer from depression and are comfortably above the upper age limit (25) of those most prone to strong behavioural responses. These adults are however no less vulnerable to mental health problems or their broader consequences. Paper 3 will focus on the true human cost of the relationship between debt and mental health. Specifically, evidence continues to mount that indebtedness plays a significant role in family breakdown. Older studies built a consensus that stable relationship status’ lead to protection from mental health problems. Recent index studies of British families have found that debt rules out any potential protection. Furthermore, married adults have significantly higher odds of being in debt than those who are single – and further evidence suggests that this plays at least some part in accounting for most family breakdowns. Paper 3, then, will focus on not only associations between debt and depression – but the real-world consequences of these associations with particular reference to family breakdowns and divorce.  

Researched and written by Craig Lynch

Previous essay 

Associations between Debt and Mental Health – Outline of Realities