Paying the price: financial hardship and its association with psychological distress among different population groups in the midst of Great Britain's cost-of-living crisis

Background: Great Britain has been experiencing a cost-of-living crisis since late 2021, with the cost of everyday essentials rising more quickly than the average household income. This study provides up-to-date information on levels of subjective and objective financial hardship during this crisis, differences across population subgroups, and associations with psychological distress.

Methods: We used data from a representative cross-sectional survey of adults (≥16 y) in Great Britain (n = 7,027) conducted January–March 2023. Subjective financial hardship was defined as reporting finding it quite/very difficult to manage financially these days and objective financial hardship as reporting having been in rent/mortgage arrears in the past 12 months. Past-30-day psychological distress was assessed with the K6 and categorised as no/low (scores ≤4), moderate (5–12), and severe distress (≥13). Covariates included sociodemographic characteristics, mental health history, smoking status, and alcohol consumption.

Results: Overall, 12.9% [95%CI = 12.0–13.8%] reported subjective financial hardship and 6.5% [5.8–7.2%] objective financial hardship. Groups experiencing more hardship included non-binary people, ethnic minority groups, less advantaged social grades, those living in private rented or social housing, those unemployed and seeking work or not in paid work for other reasons, those with more children in the household, those with a history of ≥1 mental health conditions, those who currently smoked and those who drank not at all or at very high levels. Subjective/objective financial hardship was associated with greater odds of experiencing moderate (ORadj = 1.96 [1.59–2.42]/ORadj = 1.86 [1.40–2.47]) or severe psychological distress (ORadj = 4.11 [3.07–5.50]/ORadj = 2.23 [1.52–3.29]). These associations between financial hardship and psychological distress were similar across all sociodemographic, mental health, smoking, and alcohol characteristics.

Conclusions: In the first quarter of 2023, around one in eight adults in Great Britain reported finding it difficult to manage financially and one in fifteen reported having been in rent or mortgage arrears in the past 12 months, with higher rates of financial hardship among disadvantaged groups. However, disadvantage did not appear to compound the psychological impact of financial hardship: people experiencing financial hardship were substantially more likely to report moderate or severe psychological distress regardless of their sociodemographic characteristics.