Over a quarter of adults in the North East say the state of their personal or household finances is having a negative impact on their mental health and wellbeing.

New research by insolvency and restructuring trade body R3 and ComRes found that 27% of adults living across the region selected money issues as a cause of mental strain out of a list of common causes of stress and anxiety.

Financial matters came out top in the research ahead of personal or family members’ health issues (11%), UK or global current events (14%) and relationships with family or friends  (both 12%).

And six per cent of those surveyed said the finances of other family members who didn’t live with them were currently having a negative impact on their mental health.

North East England has had the highest rate for personal insolvency of any region in England and Wales for each of the last eight years.

Neil Harrold, chair of R3 in the North East and a partner with Hay & Kilner Solicitors, says: “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 wellbeing.

“Much more needs to be done to ensure that people are informed about what their options are when they encounter financial problems so that they can deal with them without unnecessary stress. Improving financial education and financial capability could have a huge, positive impact on the country’s mental health.”

Elsewhere in R3’s latest Personal Debt Snapshot, 41% of those surveyed in the North East were worried to some degree about their current level of debt, compared to 31% in the autumn.
For those in the region with debt worries, credit card debt (40%) was far and away the primary concern, followed by mortgage repayments (21%), loans from family and friends (15%) and rent arrears (10%).
But while 47% of those surveyed said they struggled to make their money last until their next payday, the proportion of adults in the region who think their financial situation will improve over the next six months (23%) is higher than the proportion (16%) who think it will worsen in that time.
Neil Harrold continues: “The personal finance landscape is relatively benign at the moment, with real wages still growing and interest rates remaining low, but personal finance concerns are still clearly looming large for many people across the region, and with inflation set to rise throughout 2017, these pressures are likely to increase.

“The insolvency regime is there to help people with very serious financial problems resolve their debts and the associated stress, and then start again financially.

“It’s essential for anyone who thinks their financial situation is getting out of hand to proactively seek from a qualified source as early as they can, so that they can gain access to the biggest range of ways in which they can put things right again.”

1. Acknowledge the problem. Avoiding personal finance problems will only make them worse.

2. Ask for help. Professional advice is readily available and is often free of charge, whether it’s an initial meeting with a licenced insolvency practitioner, or help from the National Debtline, or a local Citizens Advice Bureau.

3. Prioritise the payments of your debts. An advisor, as mentioned above, can help.

4. Budget. Be honest with yourself, identify your essential financial commitments and cut back on luxuries. At the very least, maintain the minimum monthly credit card payments to retain your credit rating while you sort out your finances.

5. Communicate with your creditors. By getting in touch with your creditors at an early stage, you can give them an opportunity to help that might not be there in future.

6. Be transparent. Give full details about your financial situation to both your advisor and your creditors.

7. Take your time before choosing the solution that’s right for you. Don’t allow yourself to be pressurised, and make sure you are taking advice from a regulated professional.

8. Don’t keep digging. Avoid turning to new credit cards or payday loans to plug the gap in your day-to-day finances. This might only make your situation worse.

9. Learn about your options. If you require a formal insolvency procedure, there are a number of options appropriate to different levels of debt. Formal options include Debt Relief Orders (DROs) for smaller debts, Individual Voluntary Arrangements (IVAs), and bankruptcy. It will cost more time and money if you start off in the wrong solution, so make sure you take advice about all the options open to you.