Institute will seek to tackle mental health issues linked to money problems

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A new body dedicated to breaking the "devastating" link between mental illness and money problems has been launched, backed by a minimum £2 million donation from consumer champion Martin Lewis.

The Money and Mental Health Policy Institute will work with banks, lenders, regulators, health service providers to help people with mental health problems protect themselves from financial difficulties and get out of debt.

Those behind the new institute described mental health and debt problems as a "marriage made in hell" and said debt has been shown to worsen mental health problems.

The policy institute is led by former director of policy for the deputy prime minister, Polly Mackenzie, who worked in Number 10 and the Cabinet Office during the 2010-15 Coalition Government. The board of trustees includes Richard Lloyd, executive director of Which?

Mr Lewis, founder of consumer help website MoneySavingExpert.com, will be chair of trustees.

The policy institute will have an advisory board, bringing together academics, politicians and those with personal experience of mental health and financial difficulties.

Mr Lewis said: "Thankfully, business and the financial services industry have got far better at dealing with people who are having problems - yet there's never been any real focus on prevention.

"For example, you could set up a voluntary register of people, who, if their spending patterns are unusual, perhaps due to a bipolar spending spree, have their credit card cut off until a nominated trusted friend agrees it can be reactivated. This is the type of thing we want to research, and work with lenders to test and regulators and politicians to ensure the framework allows it to happen.

"Debt isn't just a financial problem - it causes relationships and families to break up, people to lose their homes and their lives. Debt is a common problem for people living with mental health problems, and it can make those problems worse."