In 2005, the then chancellor Gordon Brown launched child trust funds. Every baby born in the UK would receive a lump sum of £250 from the government, which would be automatically invested if parents did not do this themselves. The beneficiaries would be able to withdraw these savings when they were 18. The policy was regarded as clunky by some and was scrapped by the Conservatives in 2010. But judging from new research demonstrating the connection between assets and wellbeing, Mr Brown’s instinct was right. Having savings makes a huge difference to people’s lives.
The study from the Joseph Rowntree Foundation identifies two trends that are worrying in themselves – but even more so when linked together. These are financial insecurity and mental distress, and both have risen sharply over the past decade. The jobs market is a bright spot in an otherwise gloomy picture. But the fact that a million people are on zero-hours contracts, combined with low benefit levels, falling home ownership and the doubling of the private rental sector, mean that an increasing proportion of the population is chronically insecure. One-fifth of adults have savings of less than £700.
Over a similar period, levels of anxiety and depression have rocketed, to the point where 17% of adults were prescribed antidepressants in 2017-18. These cases were concentrated in the poorest parts of northern England, and the 64% growth in prescriptions between 2010 and 2017 outstripped increases in other European countries by large margins. The data shows that poor mental health is far more likely to be experienced by people who are financially vulnerable. Those stuck in precarious housing tenure, with debts, report higher levels of symptoms including sleeplessness and feelings of worthlessness. There is also a correlation with social isolation.
It should not surprise anyone that having no money keeps people awake at night. Reports from around the country about rising levels of hunger become ever more disturbing and extreme. But there are lessons here for policymakers. The risk to individuals, and the society they live in, is that people become caught in a downward spiral, whereby poor mental health is caused by economic insecurity, and in turn increases it by stopping them from working. Already, two-thirds of employment support allowance claimants report anxiety or depression. The overall cost to NHS England of mental health services is £15bn annually.
Some of this illness is preventable. Ministers must face the fact that their punitive approach to benefits, and generosity to landlords and employers, have made many lives far harder than they need have been. The ending of section 21 evictions, whereby renters can be kicked out at short notice for no reason, is shamefully overdue. New funding for debt advice must be found. Employment rights need strengthening urgently. Benefits must be uprated, and eligibility for free school meals extended to prevent even more people from becoming trapped. In the longer term, politicians must find ways to rebalance the nation’s wealth and assets towards those who have little or none.