The pandemic has had a dual impact on people's finances and wellbeing, plunging many into a downward spiral. Thankfully, as we explore, help is out there.
Last week, a new scheme called Breathing Space launched giving people 60 days' freedom from bailiffs, written notices, penalties and most interest charges.
Most importantly, it contains a special provision for people suffering a mental health crisis, allowing them to use the scheme for the duration of their treatment plus another 30 days.
This additional rule could be a godsend for people with mental health conditions and debt problems - sadly an all too common combination with sometimes devastating consequences.
Here, Which? takes a closer look at money's connection to mental health, and share where else you or your loved ones can turn to for help.
David from Essex had just started a new job when Covid-19 hit the UK. It was a role that would have allowed him to travel the world, but the effects of the pandemic saw David's new employer terminate his contract halfway through his probation period.
'This was in February 2020, so before the furlough scheme was created,' said David. 'I wasn't entitled to any redundancy pay. So suddenly I was in a position I'd never been in before.'
That position - jobless and worried about the future - is one that hundreds of thousands of people have found themselves in since the start of the pandemic.
In March 2021, 2.7 million people were claiming Jobseeker's Allowance or Universal Credit while looking for work. That's almost double the 1.4 million who were doing so in March 2020.
Covid-19's dramatic impact on many households' finances has contributed to an unprecedented number of people experiencing a mental health crisis in the past year, according to the charity Mind.
David is one of them: 'I've got absolutely no drive or motivation to do anything at all, [I feel] very short-tempered, very cynical and mistrustful, and just a shadow of my former self.'
While there are also many non-financial reasons behind declining mental wellbeing since the pandemic, poor mental health can itself create or exacerbate financial difficulties.
The close connection between money and mental health is highlighted in a 2016 by the Money and Mental Health Policy Institute (MMHPI), in which 86% of people with mental health problems said their financial situation had worsened their condition, while 72% said their mental health problems had worsened their finances.
Therapist Anthony Davis, a member of the British Association for Counselling and Psychotherapy, has witnessed this in his clients.
'Most people come because they're feeling anxious,' he says. 'Then, once I do my assessments they say: u201cOh, I'm feeling anxious because I was recently made redundant, or I was furloughed and my income has been reduced.u201d So most of the time it's interconnected.'
The MMHPI found that money problems can worsen mental health for a number of reasons, including creditors' actions, going without essentials, and demands on time and energy.
A recent Which? report found that people from Black, Asian and minority ethnic (BAME) groups were more likely to report mental health struggles linked to employment or financial issues than white respondents, but that the mainstream mental health system could do more to serve them.
Mr Davis is working with Black Lives Matter on a project to provide free therapy to people from the Black community, which aims to address this. He explains that people from BAME communities may be more likely to face financial burdens: 'There's been a difficulty for them to get the education and access to those jobs that are afforded to their white counterparts because of systemic racism.'
The financial impact of the pandemic isn't limited to job losses and reduced incomes - it has also led to a surge in scams.
Losing money in this way can have a devastating impact on victims' mental health. In the year to March 2020, three quarters of fraud victims reported being emotionally affected, according to the ONS's Crime Survey for England and Wales.
One in five lost confidence and/or felt vulnerable, one in 10 reported anxiety and/or panic attacks, one in 20 had insomnia and one in 20 suffered depression.
The MMHPI has found that people with mental health problems are three times more likely than the rest of the population to have fallen victim to an online scam. This can be because it's harder to process information and judge what is and isn't a scam. The MMHPI also attributes the greater risk to increased impulsivity, which is a common symptom of mental health problems.
For Sarah from Bristol, underlying problems led to a gradual build-up of financial turmoil.
'I developed mental health problems from quite a young age,' she said. 'A lot of it was due to not being diagnosed with autism until I was 42.'
Growing up, Sarah says she 'squashed down' her mental health problems. 'I think not dealing with stuff probably very much contributed to difficult behaviours such as overspending, which then snowballed into debt.'
Sarah is not alone in this. The MMHPI's study found that, during bouts of poor mental health, 93% of people spent more than usual and 74% have put off paying bills.
Sarah accumulated £22,000 of debt by taking out multiple 0% interest credit cards, transferring her balance to a new one whenever the interest-free period ended. 'Honestly, I couldn't tell you how many I had,' she said.
Being approved for so many credit cards encouraged this approach. It was like hearing: 'Here, have all this free money,' says Sarah. But with her debts piling up, she had to ask for help. 'There was nowhere else to hide.'
David also built up debt and owed around £30,000 at one point. Before he lost his job, he found it easy to make the monthly payments, but they soon became too much.
A gruelling job hunt and mounting debts left David depressed and demoralised. 'It actually drove me to the point of very seriously considering and planning suicide.'
According to the MMHPI, people in problem debt are three times more likely to consider suicide than others, with 100,000 people in debt attempting to take their own lives each year in England.
David first spoke to his lenders, who offered breathing space and payment holidays. But he noticed that staff weren't very adept at handling his enquiries.
'That, thankfully, was at the point I'd approached Citizens Advice,' he said. It told David he was a vulnerable debtor. This meant his creditors had to put him in touch with their specialist teams.
Citizens Advice also helped David apply for benefits and advised him to contact a debt charity. David called StepChange, which he says has been 'absolutely terrific'.
StepChange first helped David get three-month payment suspensions and then put him on a 12-month Covid Payment Plan. This involves paying a single manageable monthly payment to StepChange, which the charity then distributes to his various creditors.
'I do believe that a lot of people wouldn't contact a debt charity or would think that it's going to be a demeaning process, but it's not,' said David.
Sarah also called StepChange, which she says was 'really helpful and non-judgmental.' She's now halfway through a 10-year plan to pay off her debts manageably.
'Often people are too ashamed and too frightened to ask for help, and they will commit suicide,' she said. 'So to say that an organisation such as StepChange saves lives is no exaggeration.'
We've listed contact details for StepChange and other charities that can help below. 'Whatever situation you're in, somebody will be there to help you and they won't judge you,' said Sarah.
David agrees. 'That's been the saviour for me - that the help has been there once I've sought it. When you know where to go there's always a solution.'
Talking about money is taboo, but it can save lives. Everyone we spoke to for this story said speaking out is essential if you're struggling.
Even if you're doing well yourself, check in with your friends and family, who may have hidden financial or mental health problems.
As for what you can do about them, the options below should offer at least a good starting point.
Anyone struggling with debt in England and Wales could be eligible for Breathing Space. The government expects 700,000 people to use the scheme in its first year. It gives you a 60-day break from penalties, bailiffs, notices and most forms of interest.
For mental health crisis patients, it can last for the duration of treatment plus 30 days after.
To access the scheme, you'll need to contact a professional debt advisor. However, if you're undergoing mental health crisis treatment, a medical professional can certify you are having treatment and then a debt advisor will assess whether you are eligible.
Most types of debt could qualify for Breathing Space. This includes credit cards, payday loans, overdrafts, utility bills and mortgages.
What separates Breathing Space from a is the need to continue paying debts throughout the period. You won't face enforcement action, and your debts won't keep piling up, thanks to the pause in penalties and interest, but it's not a break from actually paying.
Since the start of the pandemic, millions of people have taken payment holidays from mortgages, credit cards and loans under government support measures.
The deadline to apply for a coronavirus payment holiday passed in April. Instead, creditors will now offer tailored support based on their assessments of your needs.
If you're struggling with your mortgage, for example, your monthly payments may be paused or reduced. Credit card borrowers could also have payments paused.
Like David and Sarah, you too can get free help if you're struggling with debts and your mental health.
Below, we've listed contact details for some money advice services and mental health charities to help with your wellbeing:
Magazine subscribers also get access to tailored 1:1 guidance from the Which? Money Helpline.