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Covid lockdowns caused 62% of men to suffer from stress, anxiety, anger, sleep trouble and depression. The fallout from the pandemic is likely to see these numbers rise as unemployment, poverty and economic hardship befall many more.
We may even see a more deadly outcome. During the 2008-10 recession, every 10% increase in the number of unemployed men was associated with a 1.4% increase in male suicides, according to BMJ research. Since the mid-1990s, men have made up three-quarters of all suicides.
Men’s Mental Health Month is happening right now and it’s about time we started talking about how financial technology (fintech) can reduce the impact of economics and finance on men’s mental wellbeing.
To find yourself struggling financially is extremely tough; add in societal pressures and it can become overwhelming. Many men still feel stereotyped as providers, breadwinners and family protectors. According to a Huffpost survey, 31% of men are more likely to feel pressure to be the main earner in families, compared with 19% of women.
Nearly 10% of the male population – 2.3 million – have had panic attacks as a direct result of financial worries, according to this research. For 14% of men, their sleep is affected by money concerns, and 12% ignore cash concerns because of the feeling of worry and anxiety they can cause.
In times such as these, men are vulnerable, and all too easy for the traditional financial system to take advantage of.
Change the system – we’re going out of our minds
The way money works in both the economy and for our personal finances is that we are told it is OK to manage things with interest-based debt. Not a week goes by when we don’t hear about more billions being borrowed by governments, while at home, mortgages, student loans, car payments and buy-now-pay-later are all acceptable ways of managing our lives.
Borrowing money has become the norm. It helps to manage larger purchases, such as a house or education, or to manage cash flow, such as a car hire-purchase arrangement. However, when you are vulnerable, perhaps through mental ill-health, financial concerns or you are financially illiterate, then interest-based debt can add to these stresses.
The problem with the normalisation of being in debt is that we are not very good at acknowledging the stress it can bring, especially when it becomes unmanageable. Almost half of those in problem debt also have a mental health problem, while those with mental health problems are more likely to face financial hardship. This makes for a large group of people who are vulnerable to products and services that purport to help, via credit.
What are you ‘paying’ with when you buy now, pay later?
Fintech has brought many benefits: we can set up bank accounts within minutes, we can send money cheaply to relatives abroad, we can even invest in companies through our mobiles. But it has also produced products that sadly perpetuate the belief that we can manage our money by using credit, leading to unmanageable interest payments.
“Buy now, pay later” offers bombard us when we go to complete our online shopping. For some, the option of being able to use credit, and break up the repayments, ensures we commit to the product. This is hugely advantageous for retailers. Back in 2013, 25% of shoppers abandoned their shopping because they “reconsidered their purchase”. This year, 49% of shoppers abandoned their purchase because of “extra high costs”.
Imagine being able to temporarily forget about those extra costs or doubts because someone else is offering to resolve them for you straight away. Now imagine this when you are already struggling to make ends meet – perhaps the “provider” instinct is preventing you from making sensible financial decisions.
The cost of borrowing and any late payments can be crippling. An estimated 7.7 million Brits have accumulated over £4bn of debts racked up on buy now, pay later during the pandemic. The UK Citizen’s Advice Bureau reports that shoppers were charged £39m in late fees in the past year alone. Some 96% of those who were referred to a debt collector suffered immensely, including sleepless nights, borrowing money to repay their debt and suffering from rapidly deteriorating mental health.
Things must change.
No interest in interest-based products
As stated, the fintech explosion has done some enormous good. It has challenged the traditional financial system on what it believes customers “want”. Before fintechs, banks assumed and told people what they could have. Customers were forced into a limited range of products, with very little consideration taken for their personal circumstances or financial wellbeing.
We have a responsibility to push forward with this momentum and offer products that are safe and empathetic alternatives to the likes of the buy now, pay later schemes.
It is in our interest to do so. Imagine an entire pool of customers who feel in control of their finances. They won’t fear using financial products, they will use services more often and they will push us to innovate as they challenge us more.
It is too costly, both to everyone’s mental health and to our businesses, not to see the opportunity in looking beyond the interest-based debt system.
Umer Suleman is UK general manager at ethical investment firm Wahed