Long Read

Can mental health services afford the cost-of-living crisis?

Rising prices are exacerbating already overstretched mental health services and increasing mental health pressures on all ages of the population.
Esther Onyeka, Paula Lavis, Ruth Lowe

23 January 2023

While the recent extra funding to mental health crisis services is welcomed to help mental health services address the immense pressures the cost-of-living crisis is having on the mental health of England's population, this is short-term thinking. The mental health sector need governmental support to move to preventative approaches.

Key points

  • Cost-of-living pressures are having a significant impact on the nation’s mental health.
  • This comes when already, mental health services are struggling to meet the demand for mental health support caused by the COVID-19 pandemic, in the context of squeezed budgets and workforce shortages.
  • Further increase in demand for mental health services is putting extra pressure on the health and social care system that it can ill afford this winter. The full impact of this will not be felt equitably, and the worst effects will be felt by people in receipt of means-tested benefits or on low incomes, people with existing mental health issues and people with disabilities.
  • Mental health leaders urge the government to come together to support the nation’s mental health. They are calling on the government to urgently publish a renewed suicide prevention strategy and a cross-Whitehall long term plan for mental health.

What is happening now

Increased prices and the mounting cost-of-living crisis are having a significant impact on the mental health of people living in the UK, and people with existing mental health problems are being hit hardest. Over half (54 per cent) of people surveyed this autumn, with and without mental health problems, said that rising prices had a negative impact on their mental health. Even more concerning is that nearly half said they felt anxious, nearly a quarter have been depressed and over a fifth said they were unable to cope. People with existing mental health problems were even more likely to experience these feelings, with about a third saying they were unable to cope. A recent YouGov poll found that the current financial situation was negatively affecting the mental health of nearly half of adult respondents in England (47 per cent) and Scotland (48 per cent) and 61 per cent in Wales.

Even prior to the cost-of-living crisis, families across the country in 2021 were struggling to make ends meet, with 3.8 million families on low incomes in arrears on one or more bill, or behind on repayments. Now, 7 in 10 low-income, working-age households are going without essentials, whether or not anyone in the household is in paid employment. Poverty is increasing. And the evidence shows that poverty increases the risk of mental illnesses, such as depression and anxiety.

The increased cost of living, coming so soon after the impact of the COVID-19 pandemic, poses a significant risk to the population’s health, and in particular, its mental health. The number of people with mental health problems being referred to food banks by Citizens Advice has risen sharply from 1,043 referrals in August 2020 to 2,749 in December 2022. 

Recent research highlighted a 40 per cent increase in people contacting Mind’s mental health helpline about financial matters. 

There are a number of reasons why people develop mental health problems, but we know that the social determinants of health play a significant role and that experiencing multiple risk factors increases people’s chances of developing mental health problems. This means poverty alongside living in areas with higher levels of deprivation, poor housing, experiencing family tensions or breakdown, or being isolated are all significant risk factors for mental health problems. Worrying about money is a common cause of stress, anxiety, isolation, low mood and sleep problems. 

Recent research has highlighted a 40 per cent increase in people contacting Mind’s mental health helpline about financial matters. It also found that over a fifth of people are seeing their support network less because of the increased cost of transport alongside other cost pressures and a quarter more expect that this will soon also be the case for them.

The state of mental health services

The impact that COVID-19 and the recent rise in the cost of living is having on mental health services is evident. The demand that they are now facing, and managing backlogs that built up across the whole healthcare service during the pandemic, is creating severe pressure at a time when services are already running hot.

Recent data reported that almost four times as many people are waiting more than 12 hours in A&E before they can access mental health care, often waiting for a bed, compared to two years ago. Days of delayed discharge from mental health beds have increased, frequently due to challenges finding appropriate supportive housing or social care packages. This means bed occupancy is exceeding safe limits and has been for a while. The significant pressures on mental health beds can result in people being placed out of area or in other inappropriate settings, such as placing children on adult mental health wards. Eliminating inappropriate out-of-area placements in acute adult mental health inpatient services by April 2021 was a target in the NHS Long Term Plan, but the current pressures mean that as of September 2022, there were still around 600 people in inappropriate out-of-area placements. 

This is on top of the surge in demand that occurred during the COVID-19 pandemic. In particular areas such as children and young people’s eating disorder services saw the number of young people completing an urgent pathway for eating disorder increase by 141 per cent between winter 2019/20 and spring 2021/22. Mental health leaders have also reported an increase in the acuity and complexity of need in the patients they are seeing.

We can’t afford further pressure on services as the cost of living continues to rise. In spring 2022, 1.2 million people had been referred to community mental health and learning disabilities services and have yet to receive their second appointment. This has an impact on the wider NHS - if people cannot access specialist mental health services, they are likely to turn to their GP, phone 999 or 111, or go to A&E. This will be felt across the system, impacting carers, community services, voluntary sector organisations, and other organisations providing mental health support.

Given current pressures on acute services, the recent announcement that the Department of Health and Social Care (DHSC) has allocated £150 million to mental health crisis services is welcome. Alongside this, a preventative approach, that reduces the number of people in need of crisis support, will be a more sustainable solution to pressures across the system.

High risk and vulnerable groups

Cost of living pressures will have a greater impact on certain groups of people, such as young people, people in receipt of means-tested benefits or on low incomes, and people with existing mental health issues or with disabilities.

Children and young people

For young people, the cost of living is increasingly taking a toll. An NHS Digital report from November revealed a twofold increase in the proportion of young people aged 17-22 with a probable mental health disorder who said that they could not afford to buy food or had used food banks. In seven- to 16-year-olds, 13.6 per cent of those with a probable mental health disorder said their household could not afford to keep their home warm enough, compared to about 6 per cent of those without a mental health problem.

1 in 6 children and young people between the ages of seven and 16 have a probable mental health disorder

Unfortunately, this is not over, and it is likely that the rising cost of living will impact further on children and young people’s mental health, especially those who live in communities with the highest levels of deprivation. This might be linked to the stress they are personally experiencing, or picking up on at home. Parental mental health problems also impact on the child and increase their risk of developing mental health problems.

We know that getting children off to a good start in life is essential, as health issues, including mental health problems, often continue into adulthood. However, the current issues are only adding to a high prevalence of children and young people living with mental health disorders in England. NHS statistics showed that in 2022, as many as 1 in 6 children and young people between the ages of seven and 16 have a probable mental health disorder. This increases to 1 in 4 people aged between 17 and 19. And children from households on the lowest 20 per cent of incomes are four times as likely to have serious mental health problems by age 11.

Ensuring that children and young people have easy access to early intervention support is crucial. Mental Health Support Teams (MHSTs) in schools and colleges provide this essential support service for children and young people. As of May 2022, one in five schools and colleges in England have MHSTs, and under current plans, this will increase to just over 1 in 4 (27 per cent) by April 2023. The NHS Confederation has previously called for a commitment from government to make funding available so all schools can have MHSTs. This will help reduce the risk of inequalities in service provision across the country, and promote a preventative approach to mental health care, that begins with children and young people.

Working-age adults

A telling yardstick of the impact of the recent increases in the cost of living is a recent warning from the head of the Royal College of GPs that GPs are suffering ‘moral distress’ as patients refuse sick notes due to being unable to afford time off work. It is also a concern for the future – without the ability to take physical and mental health rest, the nation’s health will further deteriorate.

Half of people who were behind on multiple bills as a result of the rising cost of living had suicidal thoughts (2022)

As the crisis persists, and more people face deprivation, there is the risk that we could see an increase in suicide rates and poor mental health. Indeed, the latest data from the Office for National Statistics reports that 1 in 6 adults are experiencing moderate to severe depression, and this increases to 1 in 4 in adults living in the most deprived areas of England. Adults with depression are finding it more difficult to pay their bills, rent or mortgage and are more likely to have to borrow money or use credit, compared to people without depression.

The National Confidential Inquiry into Suicide and Safety in Mental Health found that 57 per cent of middle-aged men who died by suicide in 2017 were experiencing economic problems - unemployment, finances or accommodation - at the time of death. This is very worrying, especially as the Money and Mental Health Policy Institute found that in autumn 2022, half of people who were behind on multiple bills as a result of the rising cost of living had suicidal thoughts.

Nearly three quarters of mothers with new-born babies report that the cost of living is impacting their mental health and wellbeing. This is concerning given the already high incidence of perinatal mental health problems which can impact on both the mother and the child, and the risk of suicide in this group.

Older people

Pensioner poverty is rising.

22 per cent of older people are already stopping or reducing spending on medications or specialist foods, with 15 per cent expected to be skipping meals in the coming months (Age UK)

Age UK also found that 1 in 10 older people are reducing or stopping their social domiciliary care in the coming months as they struggle with the increased cost of living. This is highly concerning for many reasons and will have a knock-on effect on mental health. A recent YouGov survey found that for nearly half a million older people, contact from their care worker is their only social contact. Depression is associated with social isolation. It is the most common mental health condition in older people and can sometimes lead to dementia. Having to reduce or stop social domiciliary care poses a big risk for elderly people’s wellbeing, which was already in a challenging position pre-pandemic. Losing the contact that social domiciliary care provides may therefore increase the need for mental health support in older people.

Mental health support for older people is approached differently to that of the younger population as the narrative around mental health and wellbeing differs. This means that for the older population, mental health issues and symptoms can present differently. For example, an older person might mention ‘tiredness’ instead of lack of motivation or a depressed mood. With only a small minority of older people with mental health issues currently receiving mental health support, the cost-of-living crisis risks exacerbating an already dangerous situation.

People living with disabilities and physical health conditions

A recent ONS survey found that adults with disabilities were more likely than non-disabled adults to find it difficult to afford their energy bills, rent or mortgage payments. Over half (55 per cent) of adults with disabilities reported difficulties affording their energy bills, compared to 40 per cent of non-disabled adults. People with disabilities are almost twice as likely to be unemployed than the general population, so are often on a low income.

There are also significant extra costs involved with living with a physical or cognitive disability, which have been drastically increased by the rising cost of food and fuel in particular. For example:

  • people with limited mobility often require greater levels of household heating to stay warm
  • people living with cancer may need a warmer home to cope with treatment side-effects
  • households with medical aids and devices use comparatively more energy
  • disabled households spend a greater proportion of their income on food.

The number of people with multiple impairments being referred by Citizens Advice to food banks has risen sharply from 919 referrals in August 2020 to 2,727 in December 2022. People with learning disabilities in particular report feeling lonely and that they are struggling to keep up with the increased cost of living. Many people with learning disabilities are already at a greater risk of developing mental health problems and this is likely to be exacerbated by the cost pressure associated with the rising cost of living.

Marsha McAdam, vice chair of the NHS Confederation’s Mental Health Network and service user representative recently described the tough choices she has had to make:

“I have had to make a choice between funding my social care, which I need because of my health conditions, or paying for fuel. My home is so cold, and I don’t feel that I am able to put my heating on for very long, because of the cost. So, when I am home, I spend all my time in my bedroom, under my duvet. I also have fibromyalgia, and the cold is making this flare up. It was so bad the other day, that it felt like someone had taken a cricket bat to my legs. I’m on the higher rate of benefits because of my various health conditions, and I am worried, so I really don’t know how anyone on basic benefits or low wages is managing.”

Emerging practice

NHS Confederation members are increasingly commissioning or providing mental health support that takes into account the impact of the rising cost of living. A few of these examples of innovative practice are listed here:

Life Rooms

The Life Rooms are an initiative by NHS Confederation member, Mersey Care NHS Foundation Trust. The Life Rooms model focuses on learning, social prescribing and community, and is a preventative service that improves the health of the local population – which in turn, reduces the pressure on clinical services. The Life Rooms are held in local buildings such as libraries, community centres, and during the pandemic, were also hosted online. They offer courses for positive physical and mental health, as well as practical one-to-one support in areas such as employment, housing and debt, in inclusive, safe environments.  

Since the cost-of-living crisis began, the social prescribing service has seen an influx of people seeking support with debt, finance, housing and mental wellbeing issues. Mental wellbeing issues that present at the service increasingly focus on support with benefits, emergency funds, or food and fuel costs. Older adults are also approaching the service for social interaction. In addition, there has been an increase in working-age adults visiting The Life Rooms since it opened warm hubs.

Mental Health and Money Advice

Rethink Mental Illness, an NHS Confederation Mental Health Network member, as part of the Mental Health UK group of charities, provides the Mental Health and Money Advice service via an online advice centre, which includes a section on the cost of living and mental health. It provides information about how financial challenges may impact on mental health, and how to manage money problems given the rising cost of living.

In addition, the NHS supports and part funds a variety of voluntary sector organisations to deliver crucial services to support people and their mental health related to money concerns, particularly in times of crisis:

42nd Street

42nd Street, partly commissioned by Greater Manchester ICS, is a voluntary organisation for young people aged 13-25. It provides services such as improving access to psychological therapies (IAPT) and help and advice on a range of issues including concerns about money. 42nd Steet is a member of Youth Access, and is a youth information, advice and counselling service with hubs around the country (online directory).

No Limits

No Limits is a voluntary organisation partly commissioned by Hampshire and Isle of Wight ICS. It is based in Southampton, providing a wide range of support for children and young people, including counselling. It also provides a drop-in advice centre, where people can get help with debt, money management, housing and other welfare concerns, and are members of Youth Access


Mental Health Innovations, a digital mental health charity, run a 24-hour helpline ‘Shout’. This is a free service for people who need mental health support. The Shout website has articles, blogs and resources for people struggling with their mental health, tools for dealing with the cost of living and anxiety. The service receives support from Cheshire and Merseyside Health and Care Partnership.

Calls to the government and the system

Calls to the government

  • government must consider and fully incorporate a cross-government approach to mental health within the upcoming Major Conditions Strategy, and publish an updated suicide prevention strategy without delay.

    This will help to bring Whitehall together to tackle the wider determinants of mental health, including how the rising cost of living will impact on our most vulnerable citizens.
  • The government must make funding available so all schools can have Mental Health Support Teams.

    This will ensure that children and young people have easy access to early intervention support and reduce geographic inequalities in service provision.
  • The government must introduce real terms increase to the level seen before 2015/16 to the public health grant paid to fund services and public mental health programmes to help improve the whole population’s mental health.  

    To reduce acute and chronic demand, a shift towards prevention and early intervention is essential. Cuts to public spending have meant cost-effective upstream interventions, such as parenting support, or debt and financial advice provided in the same location as mental health services, which give a good return on investment, have become more challenging to fund. 
  • The government must deliver a fully funded, long-term workforce plan.

    Following the announcement during the Autumn Statement 2022, that government will publish an independent assessment of the numbers of health workforce needed in the medium- and long-term. The government must set out how it will go further and provide funding to ensure the assessment, which includes the mental health workforce is fulfilled. Transforming mental health support is linked to addressing workforce challenges. 

Considerations for systems

  • System and local authority leaders should adopt good practice to support high risk groups and communities through the cost-of-living crisis.

    This includes learning from examples of areas already providing support to people this winter. Nottingham and Nottinghamshire ICS is reaching those who need support by ensuring that health and social care providers and local authority teams enquire about access to food and heating. It also supports people to access food banks, support with energy costs, and other offers through partnerships with the voluntary, community and social enterprise (VCSE) sector. Primary care networks in the area identify and support vulnerable households through signposting, and work with the VCSE and local authority public health teams to provide support mechanisms where available, supported by the integrated care board and place-based partnerships. Examples of emerging practice from across the country are available on the NHS Confederation’s cost of living hub.
  • Systems need to ensure prevention and early intervention are included in their strategies and plans to reduce the demand in specialist services and the government needs to provide dedicated funding to enable them to act on it.

    This includes updating local suicide prevention strategies to include the impact of the increased cost of living and learning from existing upstream interventions. More broadly, local systems should consider adopting best practice mental health support services which recognise the impact of the increased cost of living. These include services which offer financial advice, information and guidance at the same time as mental health support, such as Merseyside’s Life Rooms.



It is likely the rising cost of living will have a significant impact on a wide variety of different groups of people’s mental health, unless support is put in place. Mental health services are already under unsustainable pressure and any further increase in demand will further reduce their ability to meet needs, which in turn creates more demand as people become more unwell waiting to access services.

Mental health services do not operate in a silo – the pressure is likely to be felt across the whole health and care system at a time it can least afford spikes in demand. To reduce the impact, it is essential to put in place appropriate support for those people who have the greatest need and highest risk of developing mental health issues. The mental health sector needs to move to preventative approaches to ensure everyone has the best chance of accessing appropriate support and enjoying mental wellbeing.

If you have any questions or would like to engage with the NHS Confederation’s cost-of-living work, please contact Ruth Lowe at ruth.lowe@nhsconfed.org.


The rising cost of living threatens to push households into vulnerable positions, increasing health inequalities and worsening health and wellbeing.

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