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The UK has seen a dramatic increase in the cost of living in recent years. Costs rose sharply during 2021 and 2022 with the annual rate of inflation reaching a 41 year high in October 2022 of 11.1% before easing. 51% of adults in Great Britain reported an increase in their cost of living in August – September 2023 and UK consumer prices were 6.7% higher in August 2023 than a year before.

Food shopping is more expensive with food bank charities reporting increases in demand - and gas and electricity bills have greatly increased. High interest rates have led to higher borrowing costs for households with both mortgage interest rates and private rental prices growing at record high rates. The impact of rising prices across the UK has been compounded by a two-year fall in real household income of 4%.

The outcome of the cost of living crisis is that 13.4 million people in the UK, or one in five (20%) of the population live in poverty, struggling to afford the essentials in life such as food, warmth and accommodation.

Impact of cost of living on mental health

The challenges of living with poverty cause stress and emotional strain and have a significant impact on the mental health and wellbeing of those struggling. This is compounded by the environment of today’s turbulent world, against a backdrop of global concerns such as climate change, political unrest and war.

The Mental Health Foundation finds that stress, anxiety and hopelessness over personal finances is widespread across the UK and expects that the effects of the cost of living crisis on public mental health will be on a scale similar to the COVID-19 pandemic.

A survey for Time To Talk Day found that the mental health of 78% of Britons was affected by the cost of living crisis, with the percentage rising to 94% of those with existing mental health problems.

Increased impact on vulnerable populations

Low-income households are most affected by rising prices, with up to seven million families having to cut back on basic essentials such as heating, electricity and meals. With a disproportionate percentage of Black, Asian and minority ethnic groups living in poverty, struggling to afford their bills, rent or mortgage, it’s clear that people from an ethnically diverse background are facing a greater risk as a result of the cost of living crisis.

The harsh reality is that people living in poverty, experiencing financial stress or from minority ethnicities are more likely to develop mental health problems. But those living with social disadvantage have less access to effective and relevant traditional means of support for their mental health and do not have the funds to pay for support. They also suffer from the knock-on effect that financial worries have on people’s ability to engage in activities known to help protect mental health and prevent problems from developing, such as getting enough sleep, socialising, pursuing hobbies and taking exercise.

Additionally, access to online support has been curtailed for the million people in the UK who disconnected their broadband in the last year because they couldn’t afford it, with people on Universal Credit being more than six times as likely to have disconnected compared to their peers. They are therefore unable to access mental health support provided through webchat or other online mechanisms.