The following is a transcript of a bonus episode of The Pension Confident Podcast - Tips for managing your money and mental health. You can listen to this bonus episode or scroll on to read the conversation.
PHILIPPA: Hello. Welcome to another bonus episode of The Pension Confident Podcast - how to manage your money and your mental health. We talked about this back in episode nine, so today we’re sharing some of the best bits. You’ll hear expert insights from psychologist; Dennis Relojo-Howell, some eye-opening stories from Lila Pleban; she’s Chief Communications Officer at the Financial Services Compensation Scheme (FSCS). And there’s more on managing your day-to-day money from PensionBee’s own COO; Tess Nicholson, who’s also a Mental Health First Aider. So it was a great discussion where they shared their own experiences about money anxiety, as well as top tips for finding support and coping.
Before we get into it, remember, anything discussed on the podcast shouldn’t be regarded as financial or legal advice. And when investing, your capital is at risk.
Dennis, before we get into more detail, I think, you know, it’s important to understand and recognise that money anxiety and related mental health - this can affect anyone. I think it’d 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. At a young age, I realised I had 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’ve never experienced anything like the struggles you had growing up, Dennis. But, I mean, I do remember a lot of sleepless nights myself, stressing about how I’d manage my finances when I got divorced and I had a small child. And that stuff, it stays with you, doesn’t it? I mean, it really does inform the way you think about your future life?
DENNIS: It’s kind of an egg and chicken scenario. You know, 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’s clear from the literature is that they’re intimately intertwined.
PHILIPPA: Yeah, absolutely. Tess, how about you?
TESS: I’ve experienced money worries and I think that the thing about money is that it’s so, kind of, linked to our sense of value, of ourselves. We talk about people as being worth money. 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, that’s always been the thing that’s the last thing on my mind when I’m trying to get to sleep at night.
PHILIPPA: Yeah, it’s the big one, isn’t it, Lila?
LILA: The big time in my life was when I got divorced, if I’m honest, and I quite quickly found myself without a roof over my head, without any bank account, because everything had been frozen.
PHILIPPA: Horrifying.
LILA: But I think it was the spiral that happened after that that really got me into quite a pickle, if I’m honest. I started to build up a credit card bill, 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 into it. 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 it, about how this stuff can feel? I mean, Lila, tell us a bit about the FSCS. What do you do there?
LILA: Basically, we protect people’s money and we can pay compensation if your firm goes bust.
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, payment protection insurance (PPI), debt management plans.
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, you know, pretty much every single person that comes to us has lost something, 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’re worried, it’s keeping them up at night. We have seen people who’re suicidal. So it’s a really challenging time for us at the moment, and we have to be really on our toes.
PHILIPPA: OK, 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’d 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. You know, your savings, credit card, using your credit card 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”. You know, sometimes at the end of the month, even if actually you’re getting to the end of the month and you’ve got money left over and you’re fine, sometimes you have that feeling of, like, “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: Dennis, what about red flags on early-stage poor mental health?
DENNIS: I’d 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. So that’s a red flag. When it comes to emotional functioning, it might be that before that you see things in a more rational way, but because of money worries, you’ve 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, they’re two-to-three times more likely to develop mental health problems than higher earners. So your level of wealth and your mental health, they’re intrinsically linked, aren’t they?
DENNIS: Yes, definitely. So if you’re within a lower socioeconomic status, it impacts your health. And a lot of psychological research actually demonstrates that. But the interesting thing here is 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.
PHILIPPA: It’s your perception of it?
DENNIS: Your perception of it. For some people, if you have a debt of £2,000, that’s a lot. Yeah, whereas for some people, £20,000 isn’t a lot, but it’s actually your framing, how you see it. So these are the things that really impact your mental health.
PHILIPPA: I mean, 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, you know, we’re seeing more people looking to withdraw money from their pension before retirement age. We’re seeing that from people, you know, as early as in their 20s who’re really struggling with money. And then we’re also seeing it with people at retirement who are worried about things like, if I draw down, 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: And Lila, I mean, Tess mentioned retired people there. Obviously there are some groups we know are particularly vulnerable. 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, you know, 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 and I think you see that come through with problems around scams and fraud increasing. But also their behaviours, you know, some of the early signs we see of people being in quite a lot of distress are their behaviours. So how they speak to people on the phone when they call up, asking for an update, for example, on their claim, becoming increasingly agitated, starting to get very angry. You do see that starting, you know, coming through in the calls.
PHILIPPA: Look, let’s talk a bit about how to protect yourself. And Lila, coping strategies and things we need to know about managing this burden of money worry, because it’s not like it’s going away.
LILA: No.
PHILIPPA: What’s the first useful step you can take if you think stuff’s getting out of control, money’s getting out of control?
LILA: I think I’ll draw on my personal experience for this one and I think it’s about facing into it and looking at it and really being honest. I hid away from my money worries and they weren’t going anywhere but downwards.
PHILIPPA: Yeah.
LILA: So I think it’s about really facing into it and talking to somebody about it.
PHILIPPA: So taking stock and honestly assessing where you’re at?
LILA: Taking stock and just being really honest with yourself.
PHILIPPA: I mean, that brings us to the harsh reality of, if you just know you can’t 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’re struggling. And then there are some great organisations who can help you. We’ve got the Money Advice and Pension Service (MAPS), 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’s 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?
LILA: I did.
PHILIPPA: 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’ll 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.
TESS: I also think that it’s about understanding your own situation as well, though. You know, I have a spreadsheet that I keep -
LILA: Me too!
TESS: - with all my regular outgoings.
PHILIPPA: I don’t know why I’m laughing because it’s a good idea!
TESS: I do. It has all my regular outgoings. I put in transactions for when things, you know, for everything that goes out in my bank account. And it does sound a bit over the top, but it does mean that I can always see, like, how much money is still going to come out of my account before payday and how much money i’ve got left now. And then I know how much money I’ve got left over to spend on the nice things.
PHILIPPA: And this is why you’re Chief Operating Officer at PensionBee.
TESS: I do love a spreadsheet!
PHILIPPA: But actually, I mean, it’s 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 meantime, Dennis, what mental health support systems can people reach out to if they’re feeling overwhelmed?
DENNIS: 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’ll 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: It is but the internet is a fantastic tool and we’ve got lots of resources now. There’s, you know, 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.
PHILIPPA: Now, look, we’re almost out of time. Before we go, I’m going to ask you all for your best practical suggestion for anyone listening to this, who knows that their money worries are already putting their mental health at risk. I’ll start with Tess.
TESS: Aside from starting a spreadsheet, I think that the most important thing is to talk to somebody. And, you know, whether that’s company that sent you the bill, or whether that’s someone who can help with government support, or whether it’s just talking to somebody in your family, just so that, you know, I think when you carry the burden, it obviously does have a toll on your mental health. And also, that’s when you’re more likely to make bad decisions, you know, so it’s a cycle. So I think I’d say just make sure you’re not dealing with it on your own and talk to somebody.
PHILIPPA: Dennis?
DENNIS: Don’t drink too much alcohol.
PHILIPPA: Good one.
DENNIS: 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: Yeah, 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: That’s all for this bonus episode. But remember, if you’re struggling right now and you need to talk to someone, you can call Samaritans. They’re open 24 hours a day, 365 days a year. And the number to ring is 116123. That’s 116123.
If you’d rather text, you can just text the word ‘SHOUT’ to 85258. That’s 85258. You can speak to a volunteer for mental health innovations there, and you can do it completely anonymously if that’s what you prefer, so don’t hesitate.
You can listen back to all our previous episodes in full wherever you get your podcasts. We’re on YouTube and the PensionBee app too if you’d like to subscribe. And keep an eye on our feed, because our next episode goes live at the end of this month.
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.
