Context

The Money and Pensions Service’s 2020 UK Strategy for Financial Wellbeing set out five Agendas for Change, including a commitment to supporting those most in need. The link between financial resources and physical health has been established in a large body of research. However, this research is largely outdated, particularly given changes in the employment and life-course landscape in the last 15-20 years, with likely impacts on the nature of the relationship between socio-economic status and health outcomes.

This study was intended to update the relevant evidence to determine what is known about the link between financial wellbeing and physical health, primarily focussed on the UK. The study used the following key definitions:

• Financial wellbeing: feeling secure and in control of one’s personal and household financial circumstances, making the most of your money day to day, dealing with the unexpected and being on track for a healthy financial future.
• Physical health: the normal functioning of the body, with poor physical health as experiencing difficulties or challenges to functioning.

The study

The review was commissioned by the Money and Pensions Service (MaPS) to provide a contemporary understanding of the relationships between financial wellbeing and physical health. The research questions the review sought to address can be summarised as:

• What evidence is there of the impact of financial wellbeing interventions, including money guidance (but not debt advice), on physical health outcomes, and which are most successful?
• How do such interventions improve physical health and what are the key strengths and weaknesses in the evidence base demonstrating this?
• How does the relationship between physical health and financial wellbeing evolve over the life course, and how does this impact potential interventions?

The review was undertaken across three phases:

• Phase 1 involved scoping out relevant evidence, through specific keyword searches on Google Scholar, Google and the MaPS Evidence Hub, and direct contact with key researchers and institutes in the field, for primarily UK studies carried out in the last 10 years. This returned 47 items of mostly UK literature.
• Phase 2 involved the systematic recording of insights from the literature.
• Phase 3 involved condensing the insights into key themes.

Key findings

The main interrelated dynamics between physical health and financial wellbeing

• Health is shaped by the socio-economic context, with lower socio-economic status associated with poor health and shorter lifespans.
• Physical health affects financial wellbeing primarily as a result of the direct and indirect costs associated with poor health.
• Financial challenges influence physical health through increased stress or socio-economic insecurity, which limits opportunities for health-supporting behaviours and facilitates health-limiting and costly behaviours such as smoking and drinking.

How interventions can help

• Emerging evidence from the limited evidence that exists points to the need for societal-level investment to alleviate health inequalities.
• Successful interventions for supporting people with chronic illness include support from trained financial advisors on benefit advice and income maximisation within healthcare journeys.
• Removing the financial, social and cultural barriers to receiving healthcare to help support people struggling with financial wellbeing more effectively.

Improve future studies and evaluations for better understanding

• Future studies of health and health experience could adopt MaPS’s financial wellbeing definitions and include MaPS’ financial wellbeing questions into their data collection.
• Undertake longitudinal data collection with different groups, including for an extended period after intervention.
• Use measures which cover various aspects of health and health behaviours and financial wellbeing, including objective and subjective factors.
• Interventions could include control groups where appropriate.

Points to consider

Methodological strengths/weaknesses

• Although the authors note constraints to the scope of the review, particularly in the identification of sources, they nonetheless adopted a methodical and transparent approach which supports the robustness and replicability of findings.
• It is noted, however, that the evidence included in the review included summary, review or insight pieces, and that the evidence base, on the whole, lacked rigour, for example because interventions were small-scale and/or did not use a control group.
• Insights in the review are limited by this and should be interpreted in this context.

Applicability

• The study should be of interest to policymakers and practitioners who support people with physical health problems, poor financial wellbeing or both.
• The review should also be of interest to researchers and evaluators who wish to undertake robust research on the role of physical health and financial wellbeing, and vice versa, or who wish to understand the impact of interventions in this field.

Relevance

• The findings from the review are relevant given the Money and Pension Service’s commitment to financial wellbeing, as set out in its 2020 UK Strategy for Financial wellbeing.

Generalisability

• The findings are unlikely to generalise to other research questions given the specific nature of physical health challenges. However, there should be some transferability to other similar countries, particularly given the inclusion of some international evidence in the review.