People in the North East with money worries should act early to get help to avoid them impacting on their mental health.
That’s the view of Andrew Haslam, North East chair of insolvency and restructuring trade body R3, who is using this year’s Mental Health Awareness Week to reinforce the importance of taking steps to solve growing personal debt problems before they become overwhelming.
Research conducted by R3 last year found that over a quarter of adults in the North East felt their personal or household finances had a negative impact on their mental health, with 27% of them picking these issues out as a cause of mental strain from a list of common reasons for stress and anxiety.
North East England has had the highest rate for personal insolvency of any region in England and Wales for each of the last nine years.
The most recent quarterly Insolvency Services statistics also showed that, across the UK, there was a 6.8% rise in personal insolvencies between the final quarter of 2017 and the first quarter of this year, while the overall number is 8.5% higher than it was at the same time last year.
Further research carried out last August by R3, which is made up of qualified professionals who work to help people with money worries improve their financial situations, indicated that more than a third (36%) of the region’s adults with a mortgage felt they would find it difficult or no longer possible to afford to repay the debt if interest rates rose by one percentage point.
Two-fifths (41%) of those with money outstanding on credit cards said they would be put in a similarly challenging situation by such a rate rise.
Andrew Haslam, who is also head of specialist business advisory firm FRP Advisory LLP’s Newcastle office, says:
“Mental Health Awareness Week is an apt time to remind ourselves that, whatever else is going on in the world, things much closer to home are most likely to affect people’s mental health.
“No matter how old you are, where you live, or what you do, personal finance concerns – even concerns about others’ finances – have a significant impact on your well-being.
“While the focus on such matters is sharpening, much more still needs to be done to ensure people are informed about their options when they encounter financial problems, so they can deal with them without unnecessary stress – improving financial education and therefore financial capability could have a huge, positive impact on the country’s mental health.
“There are a number of measures that people facing money worries can take to try to resolve it, but to give themselves the best possible of re-establishing control over their finances, they need to recognise their situations for what they are and proactively decide to do something about it as early as they can.
“Facing up to the extent of money troubles is undoubtedly tough, but it’s the only way for people to move towards getting their finances back on an even keel.”
TEN TIPS FROM R3 NORTH EAST FOR DEALING WITH DEBT
- Act today. Putting off the problem is far more dangerous than dealing with it.
- Ask for help. Much professional advice is free, whether it’s an initial consultation with a licensed insolvency practitioner, the National Debtline, Citizens Advice, or the Insolvency Service helpline.
- Start by working out how much you owe right now with everything combined. Work out your income and expenditure too. Do not be vague.
- Prioritise the payment of your debts. Identify your essential financial commitments and cut down on luxuries. Identify outstanding debts with the highest interest charges and prioritise paying these. Maintain minimum monthly credit card payments to retain your credit rating.
- Communicate with your creditors. This will give them an opportunity to help, whilst silence on your part could see goodwill from your creditors evaporate further down the line.
- Learn about your options. Bankruptcy, Debt Relief Orders (DROs) or Individual Voluntary Arrangements (IVAs) provide solutions appropriate to various levels of debt. These solutions are modern, statutory and highly regulated procedures administered by professionally qualified specialists. It will cost you time and money if you start in the wrong solution, so make sure you take advice about all of the options available to you.
- Be transparent. Give full details about your financial situation to both creditors and the person from whom you’re receiving advice.
- Take a breath and choose. Don’t allow yourself to be pressurised and make sure you are talking to a regulated professional such as a licensed insolvency practitioner, rather than an unregulated provider, who may seek upfront costs, worsening the position you’re in.
- Don’t use your credit card or ‘payday’ loans to plug the gaps in your day to day finances – this is a sure sign of financial trouble, and only likely to make your financial situation worse, rather than better.
- Spend sensibly. Retailers are still desperate for your cash or credit card payments, but try to resist the temptations they’re offering if you know you can’t afford them.