Dr Jair Muñoz-Bugarin – Shining a spotlight on the impact of debt advice on health
Our research, The Economic Impact of Debt Advice, demonstrates that receiving and following debt advice generates a positive impact on health that can be quantified as delivering an annual value of up to £145 million. And we believe that the benefits may be significantly greater, having used extremely conservative assumptions in our research.
Problem debt and health problems
It is widely recognised that problem debt and health problems are closely linked. There is a wealth of evidence demonstrating that high levels of debt, or having unmanageable debts for a long period, increases the likelihood of developing health problems. Conversely, people with health issues are more susceptible to debt problems.
And it seems that the impact of debt issues on health services is on the rise. A new report from Citizens Advice has found that 80% of mental health staff said that dealing with a patient’s practical issues such as debt and money problems left them with less clinical time to address their mental health issues.
Shining a spotlight on the impact of debt advice on health
That’s why, when we commissioned Europe Economics to research the economic impact of debt advice, we wanted to make sure that it addressed the relationship between receiving debt advice and improving health.
While isolating the effect of debt advice on health was never going to be a simple undertaking, we knew that understanding this relationship was critical. So, in addition to secondary research on the topic, they also conducted primary research on 3,800 over-indebted people, using a control group who did not receive debt advice to isolate its effects.
We considered the effect of advice on over 20 health conditions and found that debt advice has a positive effect on people with depression, anxiety and panic attacks with a total saving to the health sector of up to £93 million per year.
In addition to the direct savings to the health system – in reduced treatment costs – we also found that debt advice improves the quality of life of individuals with these conditions by up to £52 million per year. This amount to total benefits of up to £145 million annually.
Since only one in five over-indebted people seek advice, the potential for increased benefits and impact is significant. This research also points to the benefits which could be achieved by a more integrated service between health and debt advice services.
That’s one reason why our new debt Commissioning Strategy places a focus on holistic services, and emphasises people with mental health problems as a key target group. We are in the process of rolling out this work in London and the North West. If you would like to be involved, please get in touch – [email protected].
This article is written by Dr Jair Muñoz-Bugarin, innovation manager for debt advice, Money Advice Service
