E9: How to reduce the risk of money worries affecting your mental health - with Lila Pleban, Dennis Relojo-Howell, and Tess Nicholson

The Pension Confident Podcast

by , PensionBee Content

at PensionBee Content

27 Sept 2022 /  

pension confident podcast host and guest photos for this episode

The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode nine here, watch on YouTube or scroll on to read the conversation.

PHILIPPA: Hello and welcome back to the Pension Confident Podcast. Pensions can be complicated. PensionBee’s on a mission to make them simple and we’re here to help you get the best out of your personal finances. I’m Philippa Lamb, and this time, we’re going to be talking about how to reduce the risk that money worries will affect your mental health.

Music starts

We’ve all got used to hearing the phrase ‘cost of living crisis‘. Bills are rising and millions of us are anxious about where that might leave us, so it’s fair to say this crisis isn’t just having an impact on our finances, it’s affecting our mental health too. The Money and Mental Health Policy Institute tells us that people facing financial difficulties are far more likely to experience issues with their mental health. 46% of people struggling with household debts also suffer from a mental health problem. So with bigger bills to come, millions of us may see our finances overstretched with all the emotional or psychological distress that can bring.

Times like this can make us feel helpless and being told not to worry really doesn’t help. So, instead today, we’re going to talk about the actions we can take to reduce that risk that money worries might make us unwell. We’ve got three experts from the world of finance and mental health here in the studio to help us with that.

We’re joined by the Chief Communications Officer of the Financial Services Compensation Scheme, that’s the FSCS for short; Lila Pleban. Hello Lila.

LILA: Hello.

PHILIPPA: Founder and Managing Director of PsychReg; Dennis Relojo-Howell is also with us. Hello Dennis.

DENNIS: Happy to be here.

PHILIPPA: And finally, we have PensionBee’s COO and a Mental Health First Aider, Tess Nicholson. Hi Tess.


PHILIPPA: The usual reminder before we jump in: anything discussed on this podcast should not be regarded as financial advice and remember when investing, your capital is at risk.

Who will be most affected?

PHILIPPA: Before we get into more detail, I think it’s important to understand and recognise money anxiety and related mental health struggles can affect anyone. If you’re all comfortable, I think it would be good to hear a bit about our own experiences and Dennis, I know you’ve got a story to tell.

DENNIS: Yes. My formative experience actually taught me about the value of money. So just to offer some context, I grew up in a slum in the Philippines where there was no running water, no electricity, and a lot of the things that we consider necessities in life. At a young age I realised that I have to help my parents. So I did a lot of jobs. I was a street vendor in the Philippines before going to university. And also from a psychological standpoint, because I’m a researcher in psychology, a lot of literature has taught us that if we don’t have money, it could significantly impact our mental health.

PHILIPPA: Yeah, I mean, I have never experienced anything like the struggles you had growing up Dennis, but I do remember a lot of sleepless nights myself stressing about how I would manage my finances when I got divorced and I had a small child. And that stays with you, doesn’t it? I mean, it really does inform the way you think about your future life.

DENNIS: Definitely. So actually, the psychological literature says that it’s kind of an egg and chicken scenario. They’re intimately intertwined, but we don’t know whether it’s the mental health issues that trigger the financial worries, or if it’s the financial worries that trigger mental health issues. But what is clear, from the literature, is that they’re intimately intertwined. In fact, if I could just mention one statistic, the charity Money and Mental Health, they carried out a study in 2019 and what they found out is that 72% of the respondents say that if you have money worries, it can impact your mental health. The same study actually also said that 86% of the respondents said that their mental health issues trigger financial worries, so they’re really linked.

PHILIPPA: Yeah, absolutely. Tess, how about you?

TESS: I have experienced money worries and I think that the thing about money is that it’s so kind of linked to our sense of personal value. We talk about people as being worth money and what we’re really saying is that they have that much money or they have assets that are worth that much money but even the language we use suggests that we’re talking about our own personal value. Even if your money worries aren’t extreme, I think that they can still often feel quite overwhelming and whenever I’ve had money worries, even if there have been other things that have been causing me stress at the same time – that’s always been the thing that’s been the last thing on my mind when I’m trying to get to sleep at night.

PHILIPPA: Yeah, that’s the big one isn’t it?

TESS: Yeah, I saw a thread on Twitter recently actually, that was talking about how it does still stay with you as well, when you’ve had those experiences, and people were talking about still feeling that pang of worry when they go to put their card in the machine. Is there going to be anything in my account? Even though they’re fine now.


LILA: Yeah, certainly I agree. I think most people have been through some financial worries. Dennis, I can’t imagine how you’ve grown. It’s an incredible story. I think for me, the big time in my life was when I got divorced. If I’m honest, I quite quickly found myself without a roof over my head, without any bank account because everything had been frozen. But I think it was the spiral that happened after that really got me into quite a pickle, if I’m honest. Not checking my bank account, the credit card started to be used. I started to build up a credit card bill, because I was comfort shopping, trying to keep the visage of being in control and being successful, but I wasn’t. I was completely and utterly falling apart and it really came down to a crunch, really at one point, and I had to face it. It took some time to figure it out, and it took some time to pull myself out of the hole. But I totally relate even now, I really struggle to use my credit card. I fear that I’m going to build up another big debt. I pay my bill off every week, because I’m so frightened of it getting any bigger than a little bit and when it does, I do panic even now many, many years later.

PHILIPPA: Yeah. So there’s a bit of insight around the table, isn’t there? About how this stuff can feel. Lila, tell us a bit about the FSCS. What do you do there?

LILA: Well, at the Financial Services Compensation Scheme, it’s quite a long word, we do call ourselves the FSCS for short, but even that doesn’t roll off the tongue very naturally. But basically, we protect people’s money and we can pay compensation if your firm goes bust. We provide a completely free service for consumers. We’re funded by the Financial Services Industry. You’ll see us on your bank account apps, ‘FSCS protected’, and we protect a large proportion of the bank accounts in the UK.

PHILIPPA: So if the bank falls over, you’re the ones that people ring.

LILA: We protect you. You saw us really come into our own in the financial crisis in 2008. But we also protect lots of other things, such as pensions, investments, funeral plans, home finance advice, PPI, debt management plans. So if your money is protected by us, then if something goes wrong, then we step in.

PHILIPPA: Which is a comforting thought. I presume you must see a lot of people contacting you at a particularly vulnerable time for them, very stressed about their financial situation. Are you seeing a lot of that right now?

LILA: Well, because of the nature of the business we’re in, pretty much every single person that comes to us has lost something. Sometimes it’s a large sum of money, often it’s everything they own. Sometimes it’s a relatively small amount of money such as PPI, but every single person that comes to us has a story to tell and there are some really common themes that we see. People are embarrassed, they feel ashamed. They are worried, it’s keeping them up at night. We have seen people who are suicidal. So it is a really challenging time for us at the moment and we have to be really on our toes.

PHILIPPA: Okay, let’s think about practical steps. Tess, earliest signs for people, red flags that they might be starting to lose control of their finances?

TESS: I think I would say that, that would be things like if you find that you’re dipping into your overdraft a bit more than you might normally, or at all. Your savings, credit card - using your credit card, maybe when you don’t normally.

PHILIPPA: Or getting another credit card?

TESS: Well yeah, and I think it’s also when you just have that sort of feeling of like, I don’t know actually where that money’s gone. Sometimes at the end of the month, even if actually you are getting to the end of the month, and you’ve got money leftover, and you’re fine. Sometimes you have that feeling of I’m not really sure where some of that money went. And I think that even that can be a very early sign of like, maybe you’re starting to lose control a little bit.

PHILIPPA: Yeah, absolutely. It’s just kind of dripping away and there’s that confusion about - there’s less than I thought. It’s always less than you thought there should be, isn’t it? Dennis, what about red flags on early-stage poor mental health?

DENNIS: I would categorise them into three. So we could have physical functioning, it could be affecting your emotional functioning, and your cognitive functioning. So as an example, for physical functioning, it might have impacted your sleeping pattern. Another is that you might be someone who is physically active, and who does exercise a lot and all of a sudden, you become easily fatigued. So that’s a red flag. When it comes to emotional functioning, it might be before that you see things in a more rational way but because of money worries, you become sort of illogical in the way you approach your problems. So those are the red flags for me.

PHILIPPA: Now, the cost of living crisis, obviously, it’s hitting people all over the country, all sorts of people. But households in the lowest 20% income bracket are two to three times more likely to develop mental health problems than higher earners. So your level of wealth, your mental health, they are intrinsically linked, aren’t they?

DENNIS: Yes, definitely. So if you’re within a lower socio-economic status, it impacts your health and a lot of psychological literature actually demonstrates that. But the interesting thing here, and what research shows is that it’s not actually the amount per se, that actually impacts your mental health. But it’s actually how you frame that, your perception of it. For some people, if you have a debt of £2,000, that’s a lot. Whereas for some people, £20,000 is not a lot, but it’s actually your framing of how you see it. Whether you have a sense of hope, whether you have a sense of optimism, or resilience even. So these are the things that really impact your mental health. When we don’t have money, we actually think that we’ve lost the ability to control things, we’ve lost our sense of agency, because we can’t provide for ourselves, we cannot provide for our family.

PHILIPPA: Tess, you must be hearing a lot of concerns from PensionBee customers?

TESS: Yeah, we are. I think predominantly right now the concerns for them are around energy prices. That’s what we’re hearing a lot of. We’re seeing more people looking to withdraw money from their pension before retirement age. We’re seeing that from people, as early as in their 20s who are really struggling with money. And then we’re also seeing it with people at retirement who are worried about things like, ‘If I drawdown, is that going to impact on my eligibility for pension credit?’. We’ve obviously had a lot of market volatility this year and so people are watching their balances quite a lot and worrying about that.

PHILIPPA: Lila, Tess mentioned retired people. Obviously there are some groups we know are particularly vulnerable. We’ve got retired people, people with disabilities, there’s a bunch of others as well.

LILA: Interestingly, a large proportion of the people that come to FSCS for help are closer to retirement and actually have less time to make up any gaps. I’m with you, Tess, that people are looking to drawdown, they’re looking to then make their money go as far as possible. I think the worry for me is that people get lured by scams, deals that are too good to be true. But we see people being lured by investments that just simply don’t exist. Wind farms in Croatia, storage pods, hotels.

PHILIPPA: We made a podcast about this a couple of episodes back. They’re so quick on their feet to jump into a financial crisis, aren’t they?

LILA: They give people hope. People start to think, ‘Oh, I can make my money back’, and it’s quite frightening. We don’t cover scams and fraud, so we can’t help these people. So it’s really important that people really look at what they’re about to do.

PHILIPPA: At the other end of the age scale, I’m thinking about gig workers, self-employed people.

LILA: Yeah. And I think then we have a different challenge, which is, people aren’t investing in their future. They’re unable to invest in their future. And then we have other things, exciting things like cryptocurrency, etc. that are a lure to make a few fast pounds. More often than not, we call them risky, high risk investments. They can leave people without anything.

PHILIPPA: The other group, which we haven’t really talked about, is all these people largely in the middle, people who’ve been comfortable, always been comfortable, not really had to worry too much. And now or looking ahead to next year, suddenly those people are thinking, ‘We could be in real trouble here, even though we’re still earning quite a lot of money. We’ve got a lot of outgoings’. That’s new, isn’t it?

LILA: Yeah, I think it’s an area that we’re looking at. I think you see that come through with people, again, the same problems around scams and fraud increasing, but also their behaviours. Some of the early signs we see of people being in quite a lot of distress, is their behaviour. Whether that’s how they speak to people on the phone, when they call up asking for an update, for example, on their claim, becoming increasingly agitated. Ordinary people who are genuinely really nice, are starting to get very angry. You do see that starting to come through in the calls.

How to protect yourself?

PHILIPPA: Let’s talk a bit about how to protect yourself and learn coping strategies, things we need to know about managing this burden of money worry, because it’s not like it’s going away. What is the first useful step you can take if you think stuff is getting out of control? Money is getting out of control?

LILA: I’ll draw on my personal experience for this one, and I think it’s about facing it, and looking at it and really being honest. I hid away from my money worries, and they weren’t going anywhere, but downwards. So I think it’s about really facing into it and talking to somebody about it.

PHILIPPA: So taking stock?

LILA: Taking stock and just being really honest with yourself. I was only able to take some practical steps to help myself, once I really faced into what was going on.

PHILIPPA: That brings us to the harsh reality of, if you just know you cannot pay a bill. Temptation is just to ignore it, stuff it in a drawer, or just not look at it on your laptop. But actually, reaching out to whoever has sent you the bill is the key thing to do, isn’t it?

LILA: I think reaching out, because many companies have procedures in place to help people who are struggling. And then there are some great organisations who can help you. We’ve got the Money Advice and Pension Service, we’ve got Money Saving Expert, Money and Mental Health. There are many organisations out there who, just, even if you don’t want to speak to anybody, just Google online and you can start to feel reassured that there is help. For me, taking control really helped me. I wasn’t in control of my money, but taking those steps made me feel in control and gave me my confidence back.

PHILIPPA: You got there didn’t you? And I should say at this point, in the show notes attached to the app, you’re going to find links to some of the organisations that Lila has been talking about. I mean, then of course, there is, what are you entitled to from the government? That’s always worth talking about because, as we know, people don’t know and a lot of that stuff goes unclaimed, doesn’t it?

LILA: Yeah, and I think that’s where people like the Money Advice and Pensions Service can really help because they’re part of the government, so they will help to point you in the right direction of any benefits that you’re entitled to. And Citizens Advice, where you can also get really, really great advice from somebody who knows the system, because that can feel quite overwhelming when you’re already feeling a bit embarrassed and shameful. And now you’ve got to navigate a system that isn’t easy to navigate. There are some brilliant organisations out there who can help.

PHILIPPA: Tess, anything you want to add to that?

TESS: No, I would agree with that. There’s so much available and there’s probably quite a lot, I think, that people don’t even realise is available. I also think that it’s about understanding your own situation as well though. I have a spreadsheet that I keep – it has all my regular outgoings. I put in transactions for everything that goes out of my bank account and it does sound a bit over the top, but it does mean that I can always see how much money is still going to come out of my account before payday and how much money have I got left now? And then I know, ‘how much money have I got leftover to spend on the nice things?’

PHILIPPA: And this is why you’re COO at PensionBee, isn’t it?

TESS: I do love a spreadsheet.

PHILIPPA: But actually, it is a good idea, isn’t it? That thing of really understanding what’s going on. And financial education, I mean, we made a podcast about that episode eight, it’s still there, you can stream it, have a listen to that. But it does stress that point about financial literacy. It might not solve your money worries, but it helps you deal with the stress, doesn’t it? Understanding your situation, even if it’s bad, is really, really good. The more you know, the better you can cope.

TESS: Yeah, because I think that money worries cause such panic in us and we don’t know how to react to them. We don’t know how to respond to money worries. People have a real sense of shame around money worries, they don’t want to admit to struggling with their money. And I think the more that you know and understand your own situation, and also what’s available to you out there, the better you’re going to be able to cope.

PHILIPPA: It does seem to me that because everyone is going to be in difficulties, some of that embarrassment may go away. I’m already seeing people a bit more ready to talk about the difficulties than perhaps they might have been even a year ago, because it’s - everyone’s in the same situation to a degree. The degree really varies, but it’s becoming a day-to-day conversation, isn’t it? Money worries, bills.

LILA: I think, culturally, it’s not something we talk about very openly in the UK. It will be interesting to see what happens. But doing podcasts like this, it is a great way for all of us to start sort of making it okay to talk about money. And I think young people are really good at talking about this stuff. I think we will start to see more of it as we all enter into what is a fairly gloomy period ahead. Although I don’t want to try and dwell on that, as you’ve probably learned, I like to put my head in the sand on some of these things.

PHILIPPA: I hear what you say, but the financial jargon really gets in the way doesn’t it? And we are going to make a podcast about this soon, about what all that jargon actually means, because I think it can be a real barrier to people, to actually doing what we’re suggesting they do. But in the meantime, Dennis, everything we’ve talked about, it’s all very well, but it’s time consuming. It’s tough to do it on your own, isn’t it? What mental health support systems can people reach out to if they’re feeling overwhelmed?

DENNIS: Just to top up what Lila and Tess have already said, I think it’s really important that you prioritise things when financial worries start to take a toll. If financial worries are already impacting your mental health, I think it’s really important that you stick with your routine. If you get up at the same time, it will help your mood. I think it’s also important that you stay active, exercise, and you update your CV and you keep on looking for jobs. It’s really important.

PHILIPPA: It’s hard to do on your own though, isn’t it?

DENNIS: Yeah, it is a hard thing to do, but the internet is a fantastic tool and we’ve got lots of resources now. There’s the Royal College of Psychiatrists, they have useful articles about how to deal with your mental health issues, and also the charities Mind, and Shelter. They have excellent toolkits when it comes to managing your own mental health specifically for financial worries.

What changes need to be made?

PHILIPPA: And of course, there is the government. Supposedly there to look after us. We’re recording this early September, we’ve got a new PM. I’d be interested to know what you’d all like to see from her and her cabinet that might ease the situation. Tess?

TESS: I think energy bills feel like a really crucial thing right now.

PHILIPPA: We’re recording this just ahead of the point when we’re expecting to hear a bit about that, but it doesn’t sound like it’s going to solve the problem.

TESS: No, it doesn’t. But for me, that would be the thing that I would want from her right now.

PHILIPPA: Yeah, Dennis?

DENNIS: I think when we’re thinking about money things, we think that the government should freeze the energy bills or put a cap on prices. But we don’t seem to acknowledge that there’s a mental - or there’s a lack of realisation that there’s a mental health aspect to it. It would be good if the government would have something in place to help people who have mental health problems.

LILA: Investing in the National Health system and making sure that we have the necessary resources - coming out of COVID, we already have a world where mental health problems have grown massively. Then I think the last thing is - there’s some bills going through Parliament at the moment, the Online Safety Bill for example, which really starts to look to protect consumers from online scams. It’s really important that those get put through. I’m quite passionate about that.

PHILIPPA: Yeah, some of the stuff we know that’s coming down the road. Now look, we’re almost out of time. Before we go, I’m gonna ask you all for your best practical suggestion for anyone listening to this who knows that their money worries, they’re already putting their mental health at risk. I’ll start with Tess.

TESS: I mean, aside from starting a spreadsheet. I think that the most important thing is to talk to somebody, whether that is the company that sent you the bill, or whether that is someone who can help with government support, or whether it’s just talking to somebody in your family. I think when you carry the burden, it obviously does have a toll on your mental health and that’s when you’re more likely to make bad decisions, so it is like a cycle. So I think I would say, just make sure you’re not dealing with it on your own and talk to somebody.


DENNIS: Don’t drink too much alcohol. When we have financial worries, or even without financial worries, it’s easy to turn to alcohol as a way to manage your emotions and pass the time.

PHILIPPA: And expensive.

DENNIS: It’s expensive.


LILA: I think, really face it, really look at your situation and talk to somebody because sometimes, it may not be quite as bad as you think it is. It may be, but at least then you know, and you can do something about it.

PHILIPPA: It’s starting that journey with a single step, isn’t it? Pick up a bill that you know you can’t pay, call them.

LILA: But I agree about alcohol. I mean, it might feel quite nice at the time, but the impact in the long term is not so good.

PHILIPPA: Yeah, moderation.

DENNIS: It doesn’t drown the problem, it irritates it.

PHILIPPA: Thank you all very much, really useful discussion. Now remember, if you are struggling right now, and you need to talk to someone, call Samaritans on 116 123. They’re open 24 hours a day, 365 days a year. You can text the word ‘SHOUT’ to 85258. That’s 85258. You can speak to a volunteer from Mental Health Innovations there. You can do it entirely anonymously if that’s what you would like best. As we’ve said, the first port of call for any mental health issues, big or small, is your GP. They can connect you with your local NHS Mental Health Trust to support you with any sort of treatment you might need. For links to all the resources and organisations we mentioned in today’s episode, go to the show notes on your app. You can find more links to useful articles from the PensionBee website.

A final reminder that everything you’ve heard on this podcast should not be regarded as financial advice and wherever you invest, your capital is at risk. Next time we’ll be continuing the discussion on money and mental health. We’ll take a look at how to manage your finances when you’re already suffering with a mental health condition. We’d love to hear any questions you have for our expert guests, so please do email them to us. Here is the address: podcast@pensionbee.com. Thanks for listening. Join us again next month on the Pension Confident Podcast.

Catch up on episode 8 and listen, watch on YouTube or read the transcript.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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