Simon Read: The recession is over, but the debt depression is not

Patricia Stoute had only been married for a year when her money worries got too much for her. She climbed to the top of the Carfax Tower in the centre of Oxford one sunny day last June and leapt to her death. She just couldn't cope any longer with the weight of worrying about the £25,000 she had built up on 14 credit cards, her inquest in January was told.

It would be easy to use Ms Stoute's tragic tale as a stick to beat irresponsible credit card companies with, but there's no evidence to suggest that lenders had forced her to borrow beyond her means. Instead it seems that her tragedy stems back to the death of her first husband in 2007 from cancer. By the time that she remarried in 2008 it seems that she was already on the downward debt cycle which led to her demise, with grief a likely factor in her growing financial problems.

Her new husband knew nothing about her debts but, after the inquest last month, urged other people with money worries to open up to their families. Malcolm Hurlston, chairman of debt charity the Consumer Credit Counselling Service, agrees. "Debt is an emotive issue and people often feel a lot of shame and embarrassment about it," he says. "Don't let this stop you from seeking advice as the sooner you seek help the more can be done to deal with your debts."

The problem for many people, like Ms Stoute, is that they feel they've let friends and family down. In reality, hopefully, those close to victims will rally round and won't be judgmental. And help and understanding can clearly make the difference between life and death in many cases. It's not surprising that the problem of depression and stress brought on by money worries has increased during the recent recession.

But a slight upturn in the nation's fortunes is not going to help the millions still stuck in the financial mire. Of the 40 million adults suffering from stress and anxiety in a Mintel survey published this week, two-fifths of them say that money is at the root of their problem. The CCCS says it is concerned about the link between debt and depression in the wake of the recession and points to a recent Aviva study which showed rising employee stress levels and an increase in long-term absence rates.

"CCCS has become increasingly aware of the emotional toll that the recession is having on people. This in turn becomes a vicious circle as the more depressed a person becomes as a result of their money worries, the harder it is for them to deal with them," says Hurlston.

"It is a complex problem that has implications for financial institutions, health organisations, advice bodies as well as employers, who in turn have a responsibility to develop their understanding of the issue."

In recognition of the growing problem, the NHS last month set up a new free Stressline for people worried about job insecurity, redundancy, debt or financial problems. Anyone calling the NHS Stressline on 0300 123 2000 will be put through to advisers who will listen and offer practical advice, such as putting callers in touch with other people who can help such as debt, housing, employment advisers, and counselling and talking therapy services.

But it's also a problem that any one of us can help solve by recognising the signs of stress in friends and family and helping them to face up to and cope with their worries. People losing control of their finances often become more secretive about their money situation, for instance. The stress of trying to cope on their own may lead them to drink more or become short-tempered.

Encouraging friends or family to talk about debt problems could help them avoid Ms Stoute's fate. Helping them to get free professional help is also a good idea. Citizens Advice Bureaux have debt experts on hand or you can call the Consumer Credit Counselling Service on 0800 138 1111.

Savers hit by rate cap

The Bank of England's decision to hold interest rates at 0.5 per cent on Thursday was bad news, according to David Black, banking specialist at Defaqto. "It is no surprise that the Bank base rate is unchanged for the 11th month in a row but it is seriously bad news for Britain's hard-pressed savers and particularly for those on modest incomes who rely on interest from savings to boost their means," says Black.

The average interest rate for a £1,000 balance in an instant- or easy-access account is currently just 0.88 per cent, which is well below the inflation rate. Some accounts pay as little as 0.01 per cent while the Coventry's Building Society's easy-access 1st Class Postal pays 3.15 per cent gross AER on balances of £1,000 or more.

"There are things that savers can do to boost their savings rates," says Black. "It has been apparent for some time that inertia and loyalty does not pay in the current savings market. A proactive approach by moving variable-rate savings accounts to take advantage of things like introductory bonuses from those banks and building societies appearing in the best-buy tables would boost the returns for many."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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