Mental Wellbeing and The Cost of Living Crisis (September 2022)

Over the past ten months I’ve been working on a longitudinal study for Citizens Advice, following over fifty vulnerable individuals to understand their experiences of the cost of living crisis, particularly with regards to rising energy bills.

Along with the rest of our team, I’ve been speaking to people across England, Scotland, and Wales – chatting to them every couple of months to understand how they’re getting on. They represent a range of vulnerabilities, with many households experiencing multiple, overlapping vulnerabilities, such as:

  • financial vulnerability (<£21,000 p.a. household income)
  • long-term health condition or physical disability
  • mental health condition
  • caring obligations (claiming carer’s allowance)
  • recent divorce / separation or bereavement
  • digitally excluded
  • low literacy / numeracy skills

Thanks to the longitudinal methodology, we have been able to shift the focus of the study in tandem with the ever-changing dimensions of the cost of living crisis – from initially focussing on experiences of energy supplier failures and interactions with energy providers, to how people are coping with rising energy bills and the increasing cost of living.

We have gained many insights into the effects of the cost of living crisis, but one issue has particularly stood out to me: mental wellbeing. Throughout the study, I’ve observed three clear impacts of the crisis in terms of mental health.

1. Concerns about money are becoming far more widespread within society, potentially harming the mental wellbeing of millions

The connection between the cost of living crisis and mental health has much to do with the state of people’s finances. Concern about money is prominent for many people at the moment. With prices increasing across the board and with no parallel pay rise, finances are becoming increasingly squeezed and preoccupations with money more acute. Constantly wondering about affording the next food shop or energy bill is impacting many people’s mental health.

Although concern about money is not new for many financially vulnerable households, who struggled to afford the essentials before the current crisis, financial pressures are now hitting those not typically considered financially vulnerable and stress about money is spreading to sections of society for whom it may not have been such a prominent concern in the past.

“Having to look out for your spending and then being aware that you’re looking out for these things has a depressing effect on me because I know that I have to be frugal, because if I don’t, I’ll be in a worse situation. It’s not like I’m being frugal to enjoy the money that I’ve got leftover – it’s because if I don’t do it then I won’t have enough.” Harry

2. Scrimping has its own, distinct effect on our mental wellbeing – particularly for the most vulnerable households

As the quote from Harry suggests, strategies to save money can also have an additional negative impact on mental wellbeing – the effect of a backward slide in living standards as individuals make cutbacks to things they consider non-essential, but which ultimately provide them with pleasure and enjoyment. Whether specific foods, leisure activities, or socialising with friends or family, people are cutting back on the things they enjoy. Though many vulnerable households have long made such cutbacks, the rising cost of living is forcing people not used to such sacrifices to scrimp and save to make ends meet, making their life miserable.

Many vulnerable people are also making cutbacks to essentials that have seen the steepest price rises over the past 12 months: fuel, energy, and food. Many report using the car less, instead taking public transport, cycling, or walking. A significant number of vulnerable households reported batch cooking meals then reheating or defrosting in the microwave, saving both on food costs and the energy required to cook. Some have also been eating food that does not require heating or cooking, such as sandwiches and salads, while others have been washing themselves less, taking fewer showers or baths, all to cut down on the amount of energy they are using.

Individuals on prepayment energy meters are making particularly extreme cutbacks to cope with rising prices.

“We’ve been eating a lot of sandwiches to reduce the amount we have to turn on the cooker. It’s fine for the moment, but when it comes to winter I will want to have a hot meal.” Jessica

“I’ve been batch cooking when I can…. I can get the oven heated up and make all my meals for a week and then just microwave them from frozen”. Harry

During the winter, we also encountered several extreme methods to reduce heating spend. These included:

  • leaving the house to avoid heating it
  • heating only a single room in the house
  • setting the thermostat below 18 or more
  • choosing between ‘heating and eating’

When you haven’t [got money], it’s trying to decide whether it’s £5 for gas or £5 for potatoes, bread and some milk.” Elise

“Everything is so tight – I have to make a decision, do I cook or do I put the heating on?” Anna

Cutbacks on essentials like heating, eating, and washing represent the most significant backslides in standards of living that we have seen during the study. The vulnerable households making these cutbacks feel like they are barely surviving, living just to pay the bills. Taking such self-deprivation measures is taking a serious toll on their mental health.

“It’s manageable, I just about survive, but it’s not comfortable. It doesn’t feel nice to have to live like that, because it’s like why are you constantly working your ass off trying to do things – after you pay tax and your rent, you’re working to just about survive and it’s this cycle of ‘when will it get better?’.” Alesha

3. For those with pre-existing mental health problems, the challenges of dealing with the rising cost of living are more acute

Managing money is often already difficult and stressful for those with pre-existing conditions, and mounting financial pressure is only aggravating their mental health.

“The price of stuff has just gone up – the changes have affected me financially. I suffer from anxiety and depression, and these changes aren’t helping.” Steve

As this quote from Steve illustrates, conditions such as depression or anxiety are made worse by the stress of the crisis and concern about money. Moreover, mental health conditions can compound the impacts of the crisis as people suffering from anxiety or depression bury their head in the sand with regards their finances to preserve their mental wellbeing.

Some people simply don’t open their post, avoid looking at bills, or ignore the phone, with the result they run up debt or arrears with their supplier. In addition, they often don’t access much needed support as the process of dealing with the issue and reaching out takes mental effort and courage. Though at the time such coping strategies may seem the only option in terms of preserving mental wellbeing, they only kick the issue into the long grass and may lead to further detriment down the line.

 “I’m wondering where I am going to get money for the next food shop. I am getting calls from the utility supplier and I don’t answer as I can’t pay – I’ve buried my head in the sand.” Aisha

“I don’t like opening letters from utility companies. It stresses me out.” Harj

With energy bills set to rise again in October, there is a widespread feeling that the worst is yet to come. Many are looking towards the winter months with apprehension, uncertainty, and, in some cases, fear. As the cost of living crisis worsens, so will people’s mental wellbeing.

For further information, contact:

Oscar Maclagan, Senior Research Executive