Navigating the Financial Strain: How Health Issues Can Lead to Debt

Navigating the Financial Strain: How Health Issues Can Lead to Debt

Health challenges such as illnesses, injuries, and chronic conditions not only bear physical and mental tolls but can also precipitate financial distress. A study by the Health Foundation reveals a concerning correlation in the UK, with 20% of individuals grappling with severe debt also reporting poor health states.

The Financial Fallout of Health Issues

The repercussions of health issues on one’s financial stability can be profound. Whether it’s due to necessary time off work, a reduction in work hours, or a complete cessation of employment, the resultant dip in income can severely hamper one’s ability to manage bills, thereby heightening the risk of incurring debt.

This risk is compounded for those assuming caregiving roles for ailing family members, often necessitating reduced work hours or a transition to more flexible, albeit lower-paying, employment.

Moreover, the financial burden of managing a health condition can be substantial, encompassing costs such as frequent medical appointments, hospital parking fees, specialist treatments not covered by the NHS, and prescription charges.

The Reciprocal Impact of Debt on Health

The interplay between health and debt is bidirectional, with financial struggles exacerbating existing health issues, particularly mental health conditions like stress, anxiety, and depression.

The strain of debt, compounded by the current cost-of-living crisis in the UK, can impede access to essentials for a healthy lifestyle, such as nutritious food and physical activity, further deteriorating one’s health.

Mental Health: The Epicentre of Debt’s Impact

Mental well-being is particularly vulnerable in the face of financial hardship. The Royal College of Psychiatrists found that half of all adults with debt problems also suffer from mental health issues. This can create a vicious cycle where mental health conditions complicate financial management, and financial stress, in turn, aggravates mental health problems.

For those whose mental health is affecting their financial management, a Debt and Mental Health Evidence Form, completed by a healthcare or social care professional, can inform creditors of the individual’s circumstances, encouraging a more understanding approach.

What can I do if I’m struggling with my health and worried about debt?

Apply for benefits and grants
There are several different benefits that you may be able to claim if you’re suffering from a long-term or severe health condition that limits your ability to work. Depending on your circumstances, you might qualify for:
·       Free or reduced cost NHS treatment
·       Council tax and/or housing benefit
·       Government mortgage scheme help
·       Industrial Injuries Disablement Benefit
·       Personal Independence Payment (PIP)
Charities can also offer grants and loans for people affected by certain illnesses such as Macmillan, who are able to provide financial support to some cancer patients. You may also have payment protection insurance on some of your debts. Be sure to investigate and make a claim if you can.
Speak to your employer
If you’re employed full or part-time and unable to do your job normally due to illness, you can ask your employer to make reasonable adjustments such as allowing you to work for home until you recover. If you need to take time off, check your employment contract as you may be eligible for company sick pay. Statutory sick pay is also available for up to 28 weeks. To qualify, you must be employed and have been earning at least £112 a week in the two months before you stopped working.
Make a new budget 
Whether you’re expecting your income to be reduced for a short time or your health problems require you to make a more permanent change, it’s worth making a new budget that better reflects your current circumstances. Writing down all your essential payments can help you identify the costs that you can easily cut out of your monthly spend as well as offer reassurance that you know exactly how much you need to cover the basics.
Seek debt advice 
Getting professional debt advice can not only help you find solutions that could start to tackle your debts, but it could also alleviate some of the stress that is making your health problems even worse. Our friendly team will take the time to understand your situation and talk you through the different debt management solutions available so that you can find the right one for you. They could even help you enter a Mental Health or standard Breathing Space if that would be the best next step.
Navigating health problems and debt? Our team My Debt Plan is here to help. Give us a call on 0161 8260 585 or visit the website for more information.