Debt and mental health

Sometimes, debt and mental health can be very closely linked. Feeling overwhelmed by money worries can lead to anxiety, stress or depression – and struggling with mental health can make it harder to manage debt effectively. The good news is that targeted, expert help is readily available.

By understanding the relationship between debt and mental health and taking practical and achievable steps, you can regain control and improve both your financial and emotional wellbeing.

In this guide:

• How debt affects mental health
• Signs your mental health may be affected by debt
• Practical steps to manage debt and improve mental health
• Where to get independent debt and mental health help
• Talking about debt and mental health
• Available help

How debt affects mental health

Debt can create an ongoing sense of pressure and worry. If left unchecked, it may contribute to:

• Persistent stress or anxiety about bills and repayments
• Difficulty sleeping or concentrating
• Feelings of shame, guilt or low self-worth
• Avoidance behaviours, such as ignoring letters or not opening bank statements

Understanding how debt affects mental health is the first step to breaking the cycle. Once you recognise the impact it may have on your wellbeing, it’s easier to take small, manageable steps toward regaining control.

It’s also worth noting that struggling with your mental health doesn’t mean that you’ll also have troubles with debts or money management. But debt can be stressful, so it can be helpful to understand the common links.

Even common symptoms of mental health challenges such as depression and low mood can impact your motivation when it comes to managing money. But there are plenty of ways to help and address this before it begins to escalate.

Signs your mental health may be affected by debt

Everyone experiences stress differently, but common signs may include:

• Feeling constantly anxious about money
• Struggling to concentrate or make decisions
• Avoiding financial correspondence because of debt
• Avoiding social interaction
• Increased irritability or mood swings
• Feeling hopeless or overwhelmed

Recognising these signs early allows you to seek support before your stress becomes unmanageable. If this feels familiar, you’re not alone. Only one in five brits feel financially comfortable, according to our recent consumer survey of 1,000 UK adults. And when it comes to discussing money and debt anxiety, it’s common to experience feelings of unease or guilt.

But it doesn’t have to be that way. With the help of a few practical steps and expert support, many people who’ve been in a similar position have come out the other side.

Practical steps to manage debt and improve mental health

Taking action in small, realistic steps can make a big difference for both your mental health and debt.

1. Face the situation gently

Acknowledging your debt doesn’t mean you have to solve everything at once. Start by listing your debts and any regular outgoings. Seeing things on paper can make them feel less overwhelming and help you understand what’s manageable.

2. Make a simple money plan

A clear plan reduces uncertainty. Break down your income and spending to identify where adjustments can be made. You can use budgeting frameworks like the 50/30/20 rule or read our guide on personal cash flow budgeting for practical tips.

3. Prioritise essential payments

Focus on housing, food, utilities and essential travel. The key bills that keep your household running. If meeting your priority payments feels impossible, reach out to creditors to discuss a temporary arrangement – many are willing to work with you when you explain your circumstances. Facing  the problem directly is the best way to resolve it.

4. Explore debt solutions

Depending on your situation, there are different debt solution strategies that may help, including:

• Debt Management Plans (DMPs): Structured plans to repay what you owe at an affordable rate. Learn more in our guide on debt management plans and loans.
• Debt Snowball Method: Focus on repaying smaller debts first to gain momentum. Read our debt snowball method guide to find out how to get started.
• Debt consolidation loans: Debt consolidation loans may help simplify payments, but always check costs and suitability.

Don’t forget, you don’t have to work this out on your own. Professional advice from organisations such as StepChange, Citizens Advice, MoneyHelper, National Debtline and PayPlan is invaluable when exploring these options.

5. Track progress and celebrate small wins

Even tiny successes – such as paying off a bill, sticking to a budget or reaching out for help – can boost your confidence and help you see things in a different light. Tracking your progress can help motivate you on your journey and reduce feelings of anxiety.

Where to get independent mental health and debt help

Debt can feel isolating, but there are trusted organisations and charities out there who are always here to help. Some can help with specific issues around debt, while others are mental health experts. If in doubt, speak to both.

Mental health support services:

• Mind: Practical advice and emotional support
• Samaritans: 24/7 confidential support: call 116 123
• NHS Mental Health Services: Free therapy and support

For a full list of resources, check out our complete guide to third-party help and support.

Financial support services:

• StepChange: Free debt advice and structured repayment plans
• Citizens Advice: Debt support and guidance on benefits
• MoneyHelper:  Tools and guides for financial planning
• National Debtline: Expert advice on managing debt
• PayPlan: Help with debt solutions and management

Talking about mental health and debt

Opening up about your situation is often the hardest step, but talking can help ease the burden.

• Choose a trusted person: This could be a friend, family member or professional advisor.
• Try not to overcomplicate it: We understand how overwhelming it can be when you’re coping with financial stress. But something as simple as, “I’ve been struggling with debt, and it’s affecting my mental health”, is a great place to start.
• Use writing if necessary: Emails, notes or journaling can help communicate your feelings before talking to someone about them. They can also help provide useful prompts when you’re speaking to a professional.
• Ask for help without guilt: Everyone faces financial stress at some point in their lives – seeking support is a sign of strength, not weakness.

Support is always available

Debt and mental health issues can feel isolating, but you can break the cycle when you equip yourself with the right knowledge, planning and support. Taking small, consistent steps, speaking up and seeking professional advice can help you regain control and reduce anxiety.

For further guidance, explore our other supportive guides on dealing with financial stress, budgeting strategies and financial wellbeing tips.

Remember: there’s no shame in seeking help. Whether it’s debt advice, mental health support or simply talking to someone, support is always available. The first step on the road to recovery is always the most important one.