Previously comfortably-off people who suffered sudden and massive drops in household income during the pandemic crisis recorded the sharpest increases in mental illness, according to a major survey. While mental health worsened across all groups during the period, those forced to become newly dependent on universal credit and self-employment grants experienced the most dramatic and ongoing decline in mental wellbeing. Some 42% of this group – called “help-seekers” by researchers – reported being in poor mental health in January, up 13 percentage points compared with before Covid, suggesting they continued to struggle with the overnight loss of work and income. “The pandemic took people who had been for decades living on a comfortable income into a totally different world overnight. The shock of that sudden drop towards the poverty line was enormous,” said Neil Smith, head of analysis at the National Centre for Social Research (NatCen), which carried out the study. Alarming rates of mental ill health were also recorded in a second group, categorised as “multi-strugglers”, and defined as having multiple longstanding financial difficulties. More than half experienced mental distress in April 2020 during the first lockdown, falling back to still-high pre-pandemic levels (39%) by January. Black and minority ethnic people were twice as likely as white people to be in “help-seeker” and “multi-struggler” categories. Over a fifth of all new mental illness diagnoses during the pandemic fell into these two groups, which account for just 8% of the UK population. The lowest rates of mental illness were recorded in the “beneficiaries” category – people whose incomes increased during the pandemic – and the “undisrupted”, those whose incomes were unaffected, often pensioners. The findings are likely to focus attention on widening health and income inequalities as well as the respective levels of social security and job support benefits. Most help-seekers and multi-strugglers were not furloughed but on universal credit or the self-employment income support scheme. People who were furloughed typically lost 9% of their income, while those on universal credit saw their income dip by 47%, according to estimates by the Resolution Foundation. Even with the £20 a week uplift for universal credit, recent research suggests the benefit fails to cover many new claimants’ basic living costs. Although the prospect of a post-lockdown return to work may lead to an improvement in mental health levels, Smith warned policymakers against a cliff-edge removal of furlough and the universal credit top-up this autumn, saying they may have prevented even greater levels of mental distress. He said: “We can observe increased mental distress across the population as a consequence of the pandemic, but people faced with growing financial insecurity have been far harder hit than the financially secure. With the economic fallout of the pandemic expected to continue, the mental health of people relying on employment and benefits support during the crisis should not be ignored.” The NatCen study was based on data collected from over 12,000 UK adults between April 2020 and January 2021. A government spokesperson said: “We are committed to supporting everyone’s mental health and well-being. We are expanding and transforming mental health services in England, backed by an additional £2.3bn a year by 2023-24 and throughout the pandemic mental health services have been open. “For those with severe needs or in crisis, all NHS mental health providers have established 24/7 urgent mental health helplines and our mental health recovery action plan – backed by £500m – will ensure we offer the right support over the coming year to help people with a variety of mental health conditions. We would encourage anyone who may be struggling with their mental health to come forward for help. “Hundreds of billions have been spent to help those most in need throughout the pandemic, safeguarding jobs, boosting welfare support by billions, raising the living wage and introducing the £269m Covid local support grant to help children and families stay well-fed.”