The cost of living crisis is having a serious impact on people’s mental health, a financial adviser has warned.
Rachael Bell, the Practice Principal at Carlisle-based Rachael Bell Wealth Management, says money stresses are negatively impacting health and wellbeing.
Research1 shows people in the UK are now more worried about their finances (38%) than catching COVID-19 (33%).
To give a helping hand, Rachael today offers a series of tips to help people regain control and boost their mental health.
She said: “Figures indicate that many people are more stressed about money than health. But there are many ways of counteracting these effects to protect your financial and mental wellbeing.
“COVID-19 brought two years of reduced incomes and stress for many people. A significant number are still recovering, but also now face other stressful situations such as the Ukraine war, raging inflation and volatile stock markets.
“Inflation typically affects those on lower incomes most, but anyone with high outgoings can be impacted severely. This applies across the wealth spectrum.
“That squeeze impacts other elements of life, including overall wellbeing and mental health. For example, those who relied on debt may have been forced to rely on it even more, leading to a potentially dangerous debt cycle.”
A study, published in March 2022 by University College London (UCL), shows the percentage of people concerned about finances has reached its highest level since the start of the pandemic. It also shows fewer people feel in control of their finances (56%), compared to October 2021 (63%).
Happiness and life satisfaction have fallen alongside this. The proportion of adults who feel in control of their mental health fell to a worrying 49%, from 54% six months ago.
Although there are no immediate or magic cures to what is a global issue, Rachael says there are some measures that can help alleviate some of the pressures.
For people struggling, they include:
- Try to regain control over your finances; don’t bury your head in the sand.
- Create a household budget, starting with essential outgoings.
- Review your discretionary spending – things like streaming channels, takeaways and shop-bought coffees. Challenge yourself on whether they are necessary.
- Review how much money you spend on contactless payments. You may be surprised.
- If you are struggling with debt, speak to a debt counsellor who will be able to offer support and advice.
For people with investments:
- Consider whether inflation is eroding cash savings.
- Review your retirement plan if you are in the twilight of your working years.
- Check in on your financial goals i.e. saving for a child’s university fees.
- If you are retired, review your income to see if it will cover a prolonged period of rising inflation.
- Don’t make any kneejerk reactions to volatile global markets. History suggests they will recover.
- Always speak to your financial adviser before making a decision about your money
Rachael said: “If you have negative emotions around your finances, it’s time to talk to a professional – whether that’s a debt counsellor, financial planner or other kind of adviser.
“Your adviser can field any of your questions such as: am I still on track for my retirement plan? Should I do anything now, such as cut spending? What should I do if my financial or family situation has changed? How can I stop inflation from eroding my savings? No question is too small or stupid.
“Even if you think you have the solution to your problems, confirmation that you’re doing the right thing brings reassurance, which is key to wellbeing.”
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.
Sources:
1 COVID-19 Social Study, University College London (Funded by Nuffield Foundation, UKRI and Wellcome), March 2022
