The Human Impact of Interest in Society
In a society built on an interest-based financial system, the human cost is immeasurable. Debt not only deepens poverty but also severely heightens emotional and psychological distress.
In the UK, household debt has reached alarming levels, rising steadily over the last few decades. It is estimated now that the average debt per UK household is now £65,380. At the end of 2023, debt-to-household income ratio stood at 124%. As the UK population spends more and more on servicing debt payments, the financial strain forces families to cut back on essentials like healthcare, education, and even food, as they struggle to meet their debt obligations.The stress of trying to stay afloat in a system where interest accrues faster than they can repay leads to a profound mental health crisis, particularly among the poor.
The relationship between debt and mental health is well-documented. According to a study by the Money and Mental Health Policy Institute, over 420,000 people in debt in the UK alone have considered suicide, with more than 100,000 actually attempting it.
For many, the pressure of mounting debt leads to feelings of hopelessness and isolation, with debt collectors and overdue payments serving as constant reminders of their financial plight. These emotional burdens are more than just individual struggles—they reflect a systemic issue created by the very nature of interest-based finance, which disproportionately affects those who are already vulnerable.
The human cost of debt is particularly visible in low-income households, where debt is often taken on just to meet basic living needs. As interest payments compound, these families are left with fewer resources to support their well-being, often turning to high-interest payday loans, further worsening their situation. Meanwhile, the wealthy remain shielded from these pressures, able to profit from the interest payments that the poor struggle to keep up with.
Debt is not just an economic issue; it is a public health crisis. Rising debt levels have created a mental health emergency, disproportionately affecting the poor and disenfranchised. As more people fall deeper into the cycle of borrowing and repayment, the emotional and psychological toll will continue to grow, leaving millions at risk of mental health crises fueled by financial distress. The very structure of an interest-driven financial system is perpetuating this crisis, pushing those already at the margins further into despair.
Whilst interest is said to fuel growth, this blog highlights the true cost of this ‘growth’ on society. We believe a growing economy should benefit all those in society, not only a select few.
When we make choices about interest in consuming or benefitting from it, we are directly and indirectly contributing to a world with real consequences.
Wahed’s vision is to create a world free from interest. We believe that growth should come from real economic activity, and wealth should be built sustainably, from investing in real assets. We believe by providing professional grade investments that are always free from interest, we aim to create long-term wealth for our clients without sacrificing their faith and values.
Join the 400,000 strong community that believes in this vision too and become an investor with Wahed today.
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As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.
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