As inflation surges and wages stagnate, financial anxiety grips individuals across the globe, with the UK bearing the brunt of the crisis.
Introduction:
In an era of skyrocketing prices and stagnant wages, financial anxiety has become a pervasive issue affecting billions of people worldwide. Defined as the stress and worry individuals experience due to their financial situation, this form of anxiety is taking a toll on the mental health of individuals from all walks of life. From those living paycheck to paycheck to individuals considered traditionally “well-off,” the impact of financial anxiety is far-reaching and deeply unsettling.
The Growing Crisis:
According to Jenna Vyas-Lee, a clinical psychologist and co-founder of mental health clinic Kove, financial anxiety is a result of concerns about money, debt, expenses, and financial stability. This anxiety has been exacerbated by the global rise in inflation, which has outpaced wage growth, leaving individuals struggling to make ends meet.
Kerry Papps, a professor of economics at the University of Bradford, School of Management UK, explains that although unemployment rates have remained low since the pandemic, the pressure stems from incomes failing to keep pace with inflation rather than job losses. This means that even those who remain employed find their salaries stretched thin, leading to increased financial stress.
The UK’s Struggle:
The United Kingdom finds itself at the epicenter of this crisis, with prices set to rise faster than any other advanced economy in 2023, reaching a staggering 7.2%. As the Bank of England utilizes interest rates to combat inflation, mortgage rates have surged, burdening individuals with significant increases in their monthly expenses. In comparison, the United States is experiencing a faster decline in inflation, but financial anxiety remains rampant, especially among low-income earners due to a lower minimum wage relative to the UK.
The Psychological Toll:
Financial anxiety is a textbook case of anxiety disorder, according to Vyas-Lee. The uncertainty and inability to create and execute a financial plan can trigger severe anxiety, regardless of one’s wealth or social status. What makes financial anxiety particularly acute is the catastrophic nature of money-related thoughts, often predicting financial ruin and destitution. Vyas-Lee highlights the damaging impact on self-image and self-esteem, as individuals associate their financial situation with their worth. The shame and fear of judgment associated with financial anxiety often lead people to keep their struggles hidden, exacerbating the psychological burden.
Conclusion:
As inflation continues to surge and wages fail to keep pace, financial anxiety has become a global crisis affecting individuals from all socioeconomic backgrounds. The UK, in particular, is facing the brunt of this problem, with prices projected to rise at an alarming rate. The psychological toll of financial anxiety is far-reaching, with individuals experiencing stress, worry, and a sense of impending financial ruin. It is crucial for society to address this issue, providing support and resources to help individuals navigate their financial challenges and alleviate the burden of anxiety. Only through collective efforts can we hope to restore financial well-being and mental health for all.
