1 in 5 Samaritans calls due to 'extreme financial distress'

One-in-five calls made to the Samaritans concerns ‘extreme financial distress’. 

The work the Samaritans do and the sort of calls their listeners receive makes their statistic a scary one. Personal finance is an inevitable aspect of our lives; society functions around it, and it is inescapable. But is this system really functioning if a bump in the financial road leaves a fifth of people feeling so trapped they have nowhere left to turn?

The debt burden

A social analysis of 2,000 people across the UK conducted by FairMoney reflects the statistics revealed by the Samaritans, with one-in-five respondents admitting their mental health has suffered as a result of financial stress. One-in-eight said financial problems have affected their marriage or relationship.

The same study also found 12% if oeioke avoid opening their mail to avoid acknowledging bills they need to pay, while 19% of respondents said they would hide the reality of their financial situation from friends and family if they were struggling financially.

Matthew Mitten, a partner at Secondsight, the employer benefits arm of national advice firm firm Foster Denovo, believes these statistics reflect a larger societal problem: people are ashamed to admit they are struggling with money.

‘Most people have a story about when they haven’t been able to afford something, but we’re all too afraid to talk about it,' he said. 'There is undoubtedly a culture of shame around admitting you’re in debt, and this can leave people dealing with the stress that comes with that on their own, which is detrimental to their mental wellbeing.'

Mark Polson (pictured above), founder of platform consultancy The Lang Cat said that if anything, he is 'surprised’ the Samaritans statistic is not higher given the many ways people can end up in debt. He argued that people in financial services should ‘try and understand that whatever scheme people are investing in, whatever we in our profession do to try and make a profit, it will impact others.

‘We hear stories about people struggling with online gambling getting themselves into terrible situations, and a lack of regulation means people are inadvertently investing into very risky schemes and losing significant sums of money, sometimes their life savings.

‘That’s why, if nothing else, it is incumbent of this industry to support the work of charities like the Samaritans who can offer that support to those who feel like they are alone.’

Supporting the vulnerable

The term ‘vulnerable’ covers a broad spectrum of cases when used to describe a client, from those coping with the emotional distress of a bereavement to those who are simply getting older, but it also includes those who are struggling with their mental health.

Ian Richards (pictured above), a financial planner at Work to Live Financial Planning said it is more difficult dealing with a 'vulnerable client' when that  vulnerability is not related to physical health, as there is a need for extra care to be taken.

‘Heightened times of stress are, unfortunately, often times when financial decisions need to be made the most,’ he said. 

Daniel Elkington, a financial planner at East Anglia-based MT Financial Management said a hit to someone’s finances, such as being caught out by a scam, can ‘completely turn their life plans upside down’, and that is a huge burden on their mental health.

‘Advisers aren’t trained counsellors, but there is a lot of counselling skill in being good at this job,’ he said. ‘The best thing we can do is help someone come to terms with their new reality by talking them through the situation.

‘Trying to get a client to come up with their own financial plan and simply facilitating that conversation can be better than telling them what to do.'

A spokesperson for Samaritans said that when people contact them for emotional support, they often mention several concerns including 'isolation and loneliness, family mental health or illness, physical health or illness, and relationship problems, highlighting that, aside from financial stress, some people are struggling with multiple burdens, which can affect both their mental wellbeing and their judgement.

Elkington said building trust with a client is 'key' to managing questionable decisions clouded by poor judgement or mental health.

‘When you do a financial review on someone and they tell you they’re going to spend £20,000 on a new roof, it’s good to be in a position of trust with that client so you can question that decision and they will listen to you,' he said.

‘The thing is, we’re not social workers, we’re not qualified in that area, so I think the best thing we can do then is bring family members in and ensure they’re aware of what’s going on, and then hopefully they will bring the relevant and appropriate professionals involved.

'That tends to come from us knowing the client and noticing that over time they are changing – starting to become susceptible to obvious scams or concerning transactions,' he said.

‘We as advisers ultimately have a responsibility to do what is best for clients, to ensure they understand the decisions they make and take actions that benefit them as best they can,’ Richards added.

Polson believes that IFAs are generally 'extremely aware' of vulnerable clients, and that this has 'very little' to do with the FCA regulation, rather they have their own ways of managing people.

'I think the sector is generally doing an extraordinary job and doesn’t get enough credit for that, but we can always be doing more,' he said.

Getting appropriate help

There are numerous charities that seek to help those who are struggling with their mental health, and simply sign-posting someone who is struggling in the right direction can contribute towards them they get the help they need.

The Samaritans operates on a volunteer basis. Calls are free and anonymous and volunteers aim to offer a completely neutral listening service that is free of judgement, which Polson believes is why it is so impactful for callers.

‘In operating in this way, they are astonishingly impactful,’ Polson said. ‘Sometimes, people don’t need to be told what to do, they just need someone to offload to who they don't know and who won't try and advise them. The Lang Cat supports the Samaritans for that reason, and we also try to promote an open culture around mental health.'

Polson believes that, as well as supporting charities, the wider industry ‘needs to keep doing more to ensure people understand what they are doing with their money.

‘The industry does an awful lot of good – particularly advisers – but they cannot be everywhere and do everything. People need better personal financial education so they can help themselves, starting from an early age. There is not nearly enough of this, and it could help prevent people from making the mistakes that can land them in debt in the future.’

Mitten said that getting people into good habits early can help prevent these mistakes.

'People should be talked through their first payslips and given compulsory low-level education about their pensions and taxes,' he said. 'Today's "spend today, save tomorrow" attitude is getting people into problems that could be avoided if they had a better basic level of understanding.' 

‘In this day and age, I suspect that kind of support won’t come from the government so I think those of us who have made a good living from this sector could reasonably be expected to support and help promote financial education and help these astonishing charities,' Polson added. 'Some of the things the listeners at the Samaritans have to hear is harrowing,’ he said.

In 2018, ONS figures revealed the UK's the suicide rate had increased for the first time in five years, with 686 more deaths than in 2017. The work the Samaritans do saves lives, but 1 in 5 calls go unanswered because there are not enough volunteers.

You read the original article here: https://citywire.co.uk/new-model-adviser/news/1-in-5-samaritans-calls-due-to-extreme-financial-distress/a1272487